Update: my advisors at University of Maryland and I have recently written a research paper about an improved version of this basic scheme, including a proof-of-concept implementation. The paper is currently undergoing peer review, but we will announce a preprint of the paper in the next week.
Just in time to redo it using libsnark: https://github.com/scipr-lab/libsnark 
That libsnark / zero knowledge stuff is interesting to be sure. Note: I've amended my open issue to include a possible remedy and have tagged you (@gmaxwell) in it.
https://github.com/bitcoin/bitcoin/issues/4079
Cheers