As far as a web site solution for written works, there's already an Open Source project in the works. It's at
http://transformativeworks.org/projects/archive.html Maybe you can check into sharing code with them.
I'd certainly be interested in a web site project to host written as well as art related works. However, I'd like to see it offer different or better features than what's already out there. I program too, so I could certainly help with code for such a site. I think I'd like to see the code more structured, compact, reuseable and better documented than the average code that's already out there for this sort of thing. Otherwise, a project like this could quickly turn into reinventing the wheel and a large waste of time. If someone's already done something similar and you can add a few changes to make it work, starting from scratch doesn't make much sense unless you intend to do it in a much better way.
I think the issue of good Open Source tools for creating the works is separate from the issue of Open Source projects to allow hosting of the works. Also, what tools an artist/writer prefers is going to be a highly individual preference. While some will be perfectly happy with Open Source tools available, others won't. One post mentioned gimp and cinepaint. There are other Open Source graphics programs out there. They probably won't appeal to everyone, but do appeal to some. A few of the other Open Source options include mtpaint, I.mage, Imagemagick/Graphicsmagick, Tuxpaint. For vector graphics, you can check into sodipodi, inkscape, winfig (Windows), figurine (Linux). If you run a search on the Internet or Sourceforge, you'll find many others.