Only 1 or 2 other photographers in the entire town?! I would jump on this!
A friend of mine started just like you, only he got into wedding photography. I've seen his pictures. They are good. They don't look amazing, however, but most of his customers seem to really love him. He started doing about 1 wedding every two or three months for the first year, but now (3 years later) he has between 1 and 2 weddings a week. He charges 2,000 a wedding...
It's really very doable. In terms of alternate ideas, try advertising to schools, churches, clubs, etc. I can't think of a school that doesn't need at least 3 photographers for year books and such.
In terms of the camera, I would wait for the new D200 to come out, and buy it then. You'll make the money back for yourself in the end, and I'm sure it would be worth it.
Oh, and don't buy a rebel XT. It isn't a professional camera and the silver model certainly doesn't look like one.
In terms of lenses, I think you might be better off spending 2,000 dollars on a prime lense, a super telephoto (600 - 800), and a standard zoom (600 - 800) instead of one expensive lense. You can buy 2,000 dollar lenses in the future, but starting out, you will need flexibility of several different lenses.