I'm not really sure what you're asking in the first question. We're pulling losers from each round of the main tournament, regardless of which division they come from. Just ignore the divisions and think of it as one big 256 player bracket (which is what it is, really, the divisions are just to make the presentation and result reporting manageable).
For the second, being 1 week behind isn't an issue at all, as this is an unofficial tournament with no feedback into the main tournament (i.e. the winner of the loser's bracket isn't going to get a second chance at the DS.com 2012 champ or anything like that). Depending on the number of players who actually participate, we may finish the same week as the main tournament anyway (I'm assuming a third place match, so we're probably not going to be having to deal with new entries at that point).
(FWIW, if everyone participated in the losers' bracket who could, it would take 11 rounds, plus already being one week behind, which means we would finish a full four weeks later than the main tournament. Obviously that won't happen, as we only had 38 out of a possible 128 in the first round.)