Well, just like with everything in life there are good and bad things about running an online community. Because it is human nature to focus on what's wrong, let's take a note from that conventional wisdom.
The first thing I would compare this to is a quirky relationship with a person you're whom you are not truly in love, but have a lot of fun with at times. There is a sort of commitment that's there that you can't avoid, and the higher your rank, the more crap you get about it. It always starts peachy at first, everybody's new and getting to know each other, the staff is learning the ropes and interesting conversations are being started. Then I'll allude to an experience with a new roommate as the months go by. There are things that you just start to hate about the person, and in this case, the community. What was closer to heaven in the beginning is now turning into a living hell. Now people have matured, (not in the positive sense) and they are starting to get fed up with different people or different policies. Now you can compare the whole community to a kindergarten class. There are the class clowns, the ones you want to ban but have to logical reason to and the class angels, those who you would like to promote to staff positions but can't because there aren't any available.
Now what do you do in a situation like this?
At the moment I can't give you an exact answer, mainly because I haven't gotten that far, a lot of my personal communities have dissolved within a year because of technical issues so that final stage of growth never happened. But what I can tell you is to be firm. Just as one keeps personal issues and business issues separate, the same must be done for online and offline quarrels. You're probably having enough trouble in your online and offline lives, the last thing you want is to have them cross. Keep your calm and don't discriminate. If one of your favorite members loses it and breaks one of the rules, take the same action as you would as if the member from hell did it. A final comparison would be to a governmental body. Not everybody's going to be happy, but as long as the majority is, you have a community. Once that majority starts migrating to the "dark" side, then it would be common sense to analyze the situation or come up with a new game plan.
I'm saying all this as the same situation is developing in one of my communities right now. There are actions that must be taken, and sometimes you have to be a bastard to get ahead. Pick your battles; just don't pick all of them.
Let's wish this place luck and hope it still survives.