I'm not necessarily against shortest code/obfuscation contests, I'm just bitter that that is all I can find. I think its great as a novelty and certainly people seem to enjoy them, it just annoys me sometimes that the only contests I can find all force such bad habits and ugly code instead of challenging the more problem solving and algorithmic abilities that would be more beneficial in the real world.
Granted this is all subjective, plenty of people find obfuscated code beautiful and there is a level of problem solving trying to whittle down your code. Also I'm sure somebody can make a case for how this teaches you beneficial real world skills. And obviously its MUCH easier to grade these contests than anything I'm looking for.
But really I'm just ranting, I'm not suggesting you change anything about how you run your contests. Give the people what they want! BUT if you want to give it a try, I'd suggest pulling some problems from either TopCoder or the UVA contest site. Most can be written quickly if you can solve it and by changing the word problem a little bit nearly impossible to google a direct answer for. Of course you'd have to subjectively grade the algorithms given to you.