My thought:

 3) Move the challenge back to the forum. Post all entries in one thread.

Here is why...the genre challenge can stay as is, since it is slightly  esoteric compared to the challenge.  And, gallery posts for the challenge don't always mean gallery images a member wants on his or her gallery.  For instance, in the "natrual fractals" challenge I posted an image just right for that challenge but to me was not a "gallery" image, good photography or not.  The appeal was to the "challenge" and not to general membership.    I cannot see a member wanting to post a CD cover, for another instance, as a gallery image but the same is perfect for the challenge.

Lets have one challenge without the voting.  This gives members a chance to comment as the entries go along throughout the time period allowed.  For the genre, voting is fine.  I like to see one with vothing and "suspense" but one with open forum allowed.  

Just my 5 cents worth...with inflation that might not be much.         TomDart.