Kunik
What is the web address?
Lets face it people have been taking content from pay sites, news groups and e-mail groups for years and making good money off of it. I know I post now and then to the groups and hope if anyone uses the pictures on their sites they don’t remove the watermark.
But the bottom line is the pictures are stolen; with out permission of the web site owner, that’s the bottom line.
Well all pay dearly for the content on our sites, from content brokers or shooting the content ourselves. We spend tons of money for the content. Also don’t for get the bill for the hosting company to.
Kunik
“Content has come from user uploads, message forums, newsgroups etc. I understand that if I went "pay" that I would need to remove all of what I had and start from scratch in order to avoid getting in trouble.”
As far as I see it you are all ready in some kind of trouble using content that you don’t have the rights to, and not to leave out the paper work that goes along with the 2257.
Jonjayw
Is so right when he wrote, “Whether or not you're charging anyone to view what content you're displaying isn't the point. What you've got is stolen goods. If you're operation gets too big, someone's going to get upset (not about your size but about your use of their content). With the membership volume you've got you shouldn't give up . . . just change your content sources.”

My advice is get sponsors, affiliate program you can stay free and make some money at the same time. Plus get tons of legal content along the way.
You might look into www.puppycash.com