Next problem I have with trying to have a city adventure with such a large group is the infamous couple of people that want to stray from the group and talk another person into going with them. With 7+ and lets say everyoen starts in the merchant area, meet someone that wants to talk to them, 4 of them will go talk to the guy and the rest will say lets meet somewhere after your talk and the other 3 to 6 players will venture off wanting to do other stuff while all the important info is being dished out by the stranger. sigh.... very hard to keel them on track but on the other hand I understand why all 7+ would not want to go talk.
The last problem I am fighting with is... since it is a large group if I put up an ambush or something within Tyr there are 7+ mobs going to be up against them. That means a lot more noise and attraction of attention from Templars and gaurds. I had thought about giving them just X amount of rounds before people show up to see what is going on but with that many fighting I am not sure how gaurds would react.. it is like a small skirmish rather than a street fight between a few people.
Any suggestions rather than making cuts would be appriciated
Are any of your players interested in being a DM? I hope you have at least a day or so notice for whether or not people are showing up, but you could recruit a back-up DM to run a side story if you have 8 or more players on any given day.
Another option is to change your adventure style. If you have a more dungeon-focused set of adventures, you won't end up having as much trouble with people trying to do their own roleplaying scenes leaving 6-9 people left out for a few minutes. Those who want to do roleplaying could do their plotting, planning, and secret meetings an hour or so before most people show up and set up the mission. Or, see what you can do to get RP between the players. Some RP can be done in combat too. That 10 person combat might be tediously slow though. You might be able to speed it up by putting some of the players in charge of rolling attacks and damage for hazards and traps, or having the players run some/all enemies (not too difficult if you print them out from the compendium). Even if you split the party, having players run some enemies for the other players can keep everyone participating.
You can also divide up some standard DM tasks like keeping track of initiative, ongoing damage, etc. This way everyone is involved even when their characters aren't.
I put together a backstory: they were mercenaries and are now leading the group. They can make their own decisions, when players die, other mercs take their position, and when players don't show up - they are probably doing their own jobs without the others.
In all, it's worked pretty well. Some players enjoy the thrill of running a business, negotiating contracts, roleplay... while others are just there to make a fight. They are even starting to work as a team (which is amazing, because it's dark sun and this particular group of players love to backstab each other! ala paranoia).
For initiative, try pairing players together on the same initiative roll (the highest of...). I find that grouping them by role works excellently. The players work together as a team very well in this way - and can support themselves like in real life. Speeds up combat a tad...