uldah would be perfect for this , both player vs player and player vs monster.
Could for player vs monster set up a rewards system , also potetional to have small party battles of 3 to 4 people vs a group of monsters, so its one party activity for the game, kinda like bcnm of ff11 but in the arena with awards for winning.

Do a solo battle with story quest line and with rewards , can be fun rewards like costumes and pow hammers, and keep the party one seperate (no story questline) from it and give meaningful rewards for the party ones , this way everyone can still do the event.

The player vs player one could have a capture the flag type thing going on at same time while battling, could be 4 vs 4 people pvp.