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Guts is a lot of fun in a freindly home game. I am going to have to say that organizing a guts tournament is probably not a good idea. If u wanted to give it a try, start each player with a ton of chips, and make the ante very low in realation to the stacks, and try to double the antes every 20 minutes or so.
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That's good advice, but it does not answer my question --- what should be done if a player doesn't have enough chips left to match the pot if he loses?
P.S. Here are rules for 3 card guts:
http://www.superiorpoker.com/thegames/guts.html