I've been on a number of servers who's GMs and Admins participated in WoE and PvP.
On one occasion it didn't turn out very well. One of my friends owned a particular guild and our server Admin decided he wanted to join it. He did, and that was fine and dandy, but eventually this said guild became a trend due to our Admin's presence, hence, everyone wanted to be in the same guild as the Admin. After a while the trend moved to another guild, but this time it was much worse, GMs and the Admin joined this particular guild and basically ran WoE into the ground. It was to the point where at roughly 110 - 120 people on at WoE, about 85 - 90 of them were from this guild alone. A few rather cynical reviews sprouted up on RMS regarding the issue, and things became rather ugly for WoE fans, causing an almost immediate decline in the population.
I'm not saying that the situation can't work, as I've also been on servers where it has. It is just crucial that your server owner handles the situation with caution. As mentioned, having the players trust you is absolutely necessary. I think in my scenario at that particular time as well, having GMs AND the Admin present in the same guild might have been the problem. Try to distribute your GM team to other guilds if possible.
I also agree that Admins should be able to enjoy their own creations. =)