I know you guys won't believe me, but seriously, we made that shit work. And it was awesome. Well for the first 9 levels... then 2 people on their side raged quit and we rolled them from there.
The host I joined had a system for setting up the 5v5 that I feel I should share with the rest of you. Very simply he basically closed most of the slots and slowly opened them up one by one to let people join one at a time, waiting till everyone was connected before opening another slot. If someone had an asshole connection, joined and couldn't connect it was much easier to know he was the problem and boot him (which only happened once).
Suprisingly the game was pretty much lag free and it played out quite nicely (other than the rage quits).
Anyways, just to let people know not to give up hope and that 5v5 is possible!
UPDATE: If anyone is interested in reading about my weekend beta experience with outstanding bugs it can be found here: http://forums.demigodthegame.com/351486