This would a be a fairly interesting game, but the problem is that Naruto isn't the most consistent setting around. To avoid tying up in Canon knots, might I suggest running around during the year that the Fourth Hokage ruled? Orochimaru just left, Jiraiya is intermittently in the village, Tsunade is in exile, many of the characters either aren't born yet, or are genin right now.

You know that actually sounds pretty fun year. Being like the Rookie 9 genin of that ere, allows for the jounin/sensei characters of Naruto's era to appear as chunins and still learning themselves, also this year is kind of a blank slate, cause many of the active jounin or chunin would be dying at the end of the year. The RP depending on length, could simply end when the Kyuubi attacks, or time skip 10 years to us all being jounin, and then taking genin teams of the canon characters. 

Just thinking out loud, but I'd definitely be interested in a Naruto game forming