Right, but no one shorts BTC because no one lends BTC (at least not in quantity).
I think the protocol will have to be modified. There's no way around it that I can see.
I'm thinking of something along the lines of a large upfront payment from the currency creator, and a way for them to profit from long-term usage of their currency.
Something like that would juice the fund over 100% to start (where it clearly works), and would raise the cost of a competitor entering in the way d'aniel described.
I need to think about this more first though.
Say, why don't you allow the creator to sell GC provided they put as much value into the sale as they receive from the sale and then hold by the creator's funds and the buyer's funds in escrow. The creator can get their funds back when then repurchase the GC and thus destroy it. The creator profits if GC goes down relative to MC and can repurchase for less.