Can Time Machine on a server use quota?
Looks like you're trying all the right things.  I do this with a Drobo for a small number of Macs now.  I have a 2TB volume, but I don't want that to fill up with old TM backups so I just use the sparseimage trick and it works great.

It is unclear why this is getting reset for you.  Perhaps you should try this again.

I found these instructions useful: http://www.somelifeblog.com/2009/02/fixed-time-machine-backup-to-network.html