There's a lot of great suggestions here. I'd like to add a word of caution:

quite a few people have said, in essence, "Get local musicians because they'll work for cheap." Yeah, this can be true. However (speaking as a bandleader and festival participant in the Land of Constant Summer Festivals), nothing is more irritating/alienating to a band than to work cheap or free for several years "just to help get it started" and then, when there starts to be money involved, not be hired at all. Or to still be expected to perform for free when all the money goes to some out of state act. Remember to take care of the community that supports your efforts in the first place.

As far as the burn-out factor goes, my one suggestion is to increase your volunteer pool so it isn't the same people doing the same things all the time and/or the same people keeping the festival going. Perhaps this isn't an option, or won't be right away, but it's also a good idea to make sure there's at least one "Staff" position as a festival organizer (Executive Director, or what have you). That way you've already set up who has the final say in the decision making process, you're making it worth someone's while to deal with the stress (at least nominally), and if the Staff person DOES burn out you can hire a new one instead of trashing the festival. One full time person and 40 3-hour a week volunteers can often keep a thing moving longer than 10 volunteers all working 20-hours a week or more.

well, this was probably incoherent, but that's my suggestion.

Kele