*As Vannaka has already said don't be discouraged by it. I did get the chance to stop in game for the beginning of it(Weekend company). And I think you adjusted well for the players that did come.
You took the effort and the time to plan and test your activity(event), and did an excellent job of it. The planning was done well, the advertising was done well, and you were well prepared to see it through.
However, numbers do not make the event successful. Entertaining the people who participate does. You and your group adjusted the plan for those that came. You fell back on what as called a back up plan(whether planned or not) providing entertainment to those that participated as you promised to do. You also had every intention to continue the original plan if the situation changed. That's good organization guys!
I, for one hope that you, and your group take a step back and reevaluate the Tournament you planned. Ask yourselves, "How do we generate player interest?", and come right back at it. Maybe smaller this time, focusing on the individual groups. Hold a warrior's tournament, and plan a magic user's tournament, then maybe a mix and match (a match of warriors, a match of mages), start a fight club, and work your way back to the Tournament of Shadows 2.
The interest is there you may have to draw it out some.
For those who did attend I really appreciated your support.... They FC was nice...
* So, pat yourselves on the back guys. I think you did a great job at presenting this.