Hi Bob,
There's no reason why your system shouldn't work providing that you can split your inputs such that one channel can accept mic level and the other channel accept line level, at the same time. I don't know if the Z1 can do this. It's also a far from idiot-proof means of recording and very difficult without jogging the camera.
You will also lose any form of stereo since you'll have to mix down to mono in post production.
If you have someone who is just doing the video sound, then I would suggest getting a (relatively) cheap mixer, such as a Mackie VLZ and mixing the output from the PA with a bit of atmos from a mic in the auditorium, then outputting them into the camcorder. A possible drawback is that the PA output might be ever so slightly out of sync with the room mic, depending on the size of the hall and the location of your live mics. In a live situation it shouldn't be too tragic though.
Personally I would beg/steal/borrow a second camera, have it locked off on a wide shot of the stage and input the PA directly into the left/right audio tracks on that. Then have a pair of mics pointing left and right in the auditorium being fed into your main camcorder, mixing the lot in post.
Yes, mixing "live" is the quickest and simplest way of recording but (and it's a big but) one mistake and the whole recording's buggered. As for the gear... The Sound Devices Mix-pre is a t'riffic mixer but, if I remember, it only has two inputs, so you would have to get a mono-output from the PA mixer, not always that easy.
Something like this:
Mackie 1202 VLZ PRO Compact Mixer - UK Exclusive Mega Deal Andertons Music Co Guildford Surrey