Here's what I'm thinking.
Say, for the sake of simplicity, we have a legislature with 100 members. When an election rolls around, whatever the percentage of the legislature vote a particular party gets is the number of legislators they win up with. So, for example, if ESA, UMP and CUE got 30%, 40% and 30% of the vote, they'd get 30, 40, and 30 legislators respectively. All very simple.
Each party would be required to pony up at least one legislator. Let's call this individual a "senior legislator", since this is a relatively important position, in the nature of a President or Minister -- someone you don't want disappearing for long periods of time. If that individual is the party's only PC legislator, they control the whole bloc for their party. Say Uncle Joe, O'Floinn and Forbes were the three senior legislators from our current spread of parties -- they would control, respectively, 30, 40, and 30 legislators in the example above.
Clearly, compromise politics is the order of the day. If O'Floinn wants to pass legislation, he needs to either get one of the other senior legislators on board, or write something that will appeal to enough legislators from ESA or CUE (or both) that they'll jump ship and vote against the bloc. I don't know how much detail the ModCorps is willing to go into, but this might include appealing to parochial interests -- it depends how these guys are elected, and how much flesh we want to hang on their bones. In any case, if we went this route, we would definitely return to a unicameral legislature, as the workload involved in figuring these things out is probably roughly the same as what currently goes into handling the Senate. (I don't think we'll hear much argument about that, as no one really seemed to like the Senate very much.)
Additionally, parties can put forth more than one legislator, if there's another player who's interested. The interested player would petition the ModCorps, and we'd split the bloc. This would allow different PC legislators to lead ideologically different blocs of the same party. For instance, we have come to understand that the ESA has large numbers of democratic socialists, but also some radical socialists and anarchists. In the example above, if another Cornelius Dank comes along and joins the legislature, the more radical members of Josephus's bloc might split off and become his bloc. Since the radicals make up a smaller percentage of the ESA, he might only get 5-10 of the 30 total ESA legislators. (Presumably he'd replace one.)
So, to answer your question, Phalanx, the system would be scaleable. In a theoretical sense, it can't be hamstrung as easily as the current GA setup. (Of course, if one of the senior legislators vanishes, we still have the same problem, but the idea is to make that fairly unlikely by making veteran players the logical choices for those positions. It may also be worth considering allowing party leadership to do what they can currently do, and replace PC legislators at will.) It allows players who like legislating to keep at it, and, in fact, allows a basically unlimited number of players who are interested to be legislators if they so desire, but it only requires as many players to be legislators as there are parties.
Any thoughts about that?