TGIFound (http://tgifound.com) is a community-based service that lets people report found items and search for them by location.
If you see a lost item on the street you can report it on the mobile app or on the website along with the GPS coordinates, which lets people search for items for a given location. The idea is unique in that it lets people report items as found, rather than lost. It relies on the community to report items as found. The exact location is not revealed but translated to an approximate location to prevent people from gaining possession of someone else's item.
This is a free service and I intend to keep it free for as long as I can manage.
The site was built in Django in a couple of months of spare time as I was learning Django along the way. An iPhone app is also available at (http://itunes.apple.com/us/app/tgifound/id555479564?ls=1&mt=8). The iPhone app was written in Titanium. It uses quite a few APIs, such as Google Maps so was a useful learning experience for me. I hope that it's a feasible method of reuniting people with their lost items, and I hope that this project can make the world a slightly better place.
The project is still in a very early stage and this is one of the first times I've searched publicity for this. I welcome any feedbacks, criticism and bug reports, or that you simply give it a try. Thanks!
I would personally go for TTIFound.com (Thank Terry its found) but each to their own.
Oh, and as someone who is an anal lawyer, you might want people to warrant they own copyright in images they submit (maybe also indemnify you although that's overkill) and also grant you a licence to reproduce the images on your site.