It would be better to have fewer rehearsals per week (say only 2, or maybe 3) for a longer period of time (say 3 months instead of 2 months) to give you the scheduling flexibility to deal with everyone else's hectic schedules, and trying to make them all work together.

I, too, am not convinced of Reader's Theater's popularity or sale-ability.

Here's a suggestion.  Do a live radio show.  Getting scripts for old time radio shows is relatively easy on the internet.  These can be performed book-in-hand after only 2 or 3 rehearsals.  You can do a variety show that includes some comedy, some drama, some mystery/thriller.  You can even include your own commercials (dramatized ones) for your sponsors or other local businesses.  We did such a show for 5 years in a row as our season opening fundraiser; each one had a total cast of 40 or 50 (we could have done it with WAY less if need be).  Perhaps you could dig out the scripts for Mercury Theater of the Air's productions of "Dracula" or of "War of the Worlds".  You need someone who can do sound effects, live with props (yes, on stage) or in your sound booth, in order to make the radio shows work.

Geesh, don't hold yourself hostage.  If you have a situation where actors are not dedicated enough to show up for rehearsals and performances don't put yourself in a situation where they are calling the shots.  If no one wants to do theatre, maybe you do have to let it go.

My impression of the situation from what you have said is that there are a few people dedicated.  My advice is to identify them, get the commitment up front, and hand pick a show for that group.  You may be doing a two or three person show, but better that than trying a six person show where only half the actors show up.