B.J., you're right on about the fiddle. A bluegrass band really needs a fiddle. Unless there's a dobro, the fiddle is the only instrument with enough sustain to smooth out the choppy rhythms of the other players.
I also agree with using the banjo as accompanimant for a solo act. Scruggs style just wouldn't work. Bluegrass is ensemble music and without the proper instrumentation, one is much better off performing the songs in a folk or perhaps a Merle Travis style. A single person simply can't perform true bluegrass.