Some random thoughts:

I'd check to see if a spool of wire would be allowed as your 1# of fasteners. Use it to stitch together your boat, leaving the stitches in. I was also thinking of zip-ties (a pound's worth of zip-ties would be a lot), but if you used wire you'd have smaller holes for less water seepage.

I'd use the thickest paint so that it'd fill holes. Is a thick primer allowed? Stitch together the boat,coat the whole boat with paint, filling in the gaps to seal out water, then apply duct tape over all the joints after the paint's dry.

I like that 6-hour canoe design. I was also thinking of maybe stitching together 2 catamaran hulls, with 2x4's running in between and a little seat or kneeling board to paddle from. Two V-shaped hulls would give you good speed, and they could be made shorter than the canoe for better turning around the marker at the far end of the course. Or a narrow canoe and small outrigger for stability -- Hawaiian style?

I also liked Pauls question as to whether you have to actually be supported by the boat. I was thinking of making a boat you could 'wear' -- with a hole in the middle like a kid's blow-up pool toy. You duct tape flippers to your shoes made out of pieces of the plywood and kick your way to first place. Or you have a boat that's sort of like a boogie board that you lie on.

Thinking of this event makes me laugh because I just came from Christmas in northern Minnesota where there is 16" of ice on the lakes with villages of ice-fishing shanties on them...where people drive their trucks out on the water...

Dean