Not a big danger in sleeping dehydrated. I'd say there's more danger in running around during the day while dehydrated, than in sleeping in your bed. Moving around, expending energy, these things are more likely to aggravate symptoms of dehydration.
7-10 pounds in a day is a fair amount to cut. For an experienced wrestler, it's definitely possible. I would recommend some caution since it's not something you sound like you have a lot of practice with.
If you're concerned about the cut, I'd recommend cutting the weight over two days. Ideally it would be over several, but if you don't have that kind of time then it's always best to give yourself at least a couple days.
There are some guys on here with solid wrestling experience that can give you more specific advice on the particulars involved. Good luck with your tourney, let us know how you do.
14-4 Sig Bets