[RenegadeLucien]

Admittedly that would be a bit tricky, since in each successive round there would be more and more uncertainty in the skill rating of the participants of each group. But here's what I would do, using the current 275 player signups as a model:

In the first round, I'd take the median of everyone's skill rating. In this case, that's low-mid D5, so around 72-74. Then I'd add a few to that, to avoid seeing 50% AAA's. So the first round would be around 78.

In the second round, we'd expect the groups to contain roughly the top 50%, and the bottom 50%. The median of the top 50% of players is in the mid D6 range, which is about 87-89. This group would get a song of about 93. The median of the bottom 50% of players is in the high D3 range, so about 56-58. This group would get a song of about 62.

The third round we'd see groups of around top 25%, middle 50%, and bottom 25%. We'd take the expected medians again and add a few to each to get song difficulties of around 99, 78, and 40, respectively. Though by this point, that 40 might need to be adjusted upwards a point or two to account for the likely skillboosting of many of the D1-D2 players.

And so on.

And yeah, that's the idea. In Round 3, the middle group (1 strike) would contain both people who got the strike in the first round and survived the second round, and people who survived the first round and got the strike in the second round.