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How do they ban you if they can't measure your position?
They don't. Fortunately, they can measure your position, but only to a low accuracy. The case in question is not in any doubt, but there's plenty of room for doubt out to about 5cm, depending on the quality of the evidence, so I'm not expecting to see any highly contentious proceedings simply because the event secretary or district committee will say "No Further Action" if they are presented with protests over positions which are too close to call.
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rival TTing organisations start to appear
Why? I stood by the A31 pre-Christmas and didn't see anybody in the first half of the field who warranted closer inspection for 3cm compliance. The people who are out of regulation are a small number of noobs who have picked the wrong frame, and a similar number of people at the pointy end who are deliberately pushing the envelope. The market for a free-for-all amounts to about 1% of the people who are currently riding TTs. The vociferous cheats on TTF are making it sound like the end of the world, but enforcement of the regulations is going to have no effect on most testers.
No you don't, because CTT does not subscribe to any alternative dispute resolution. Once the national committee has banned you, you stay banned. A bit like here, where you can't get the supreme court to reinstate your ability to post on the forum once velocio has banned you; you sign up to all the rules, including the (possibly flawed) rules of conduct for disciplinary tribunals.