Leagues with caps can be difficult. Does a league only use the entering average for the entire year? Can the league adopt a system that takes into consideration the developed averages during the year?
I have seen scratch leagues with a cap use a penalty for teams that develop averages above the entering cap. For instance, with a cap of 640, if the team developed a team average of 675, they would be penalized 35 pins a game. I am sure this would force this team into a sandbagging type situation to keep the penalty as small as possible, but what else can you do. By sticking to the entering average, you will get teams developing players or whole teams with lower averages just to get into the league then will bowl normal during the league.
If the league is that big, I would be tempted to make a rule that states league champions must replace one member of the team to enter the league the following year. Not sure if this would prevent sandbagging, but it could prevent the same team winning over and over.