Chop - I see no problem whatsoever with using two of the hosted galleries for making free sites - however as you say they really need to be on theme and similar - heck most of the real sucessful free site submitters (not hosted) that I know of have been using their own two tgp galleries and putting a main and warning page on them for as long as I can remember - time saver.
As far as hosted free sites going down/redirecting etc - I can definitely think of one sponsor that is famous for doing this on a regular basis - I used to catch them by doing two bot runs daily - just to identify what was going on - and these days even though they had many hundreds of HFS's I only have a few left listed for them. I also know of one sponsor that used to rotate(Im not sure if they still do as I dropped pushing them) the internal pages - you wouldnt catch it on a standard bot run because everything seemed hunky-dorey to the bot
