West of Pecos clearly has more experience that I in how moderation works in the real world. For me, when your moderators are also your top contributors you have an issue. Having moderators that are more disinterested, i.e. big readers but not big posters would allow for a more "distant" approach.
I think that if your moderators are contributing to the discussion, they shouldn't moderate that discussion. The problem is without the moderators, this site doesn't operate. So when issues crop up whose opinions matter more, those of the non-moderator contributors, or the moderators, who if they decide to leave the site doesn't continue to work?
I know if I was running a business (non-profits are still businesses), where I would land on decisions.
I am not in any way trying to impugn the moderators, it seems to be a mostly thankless job, and one that is needed to keep a site such as this functional. I do think there can be improvements.