We have one solution for each department with individual projects for the subfolders. Each can be configured to deploy to the desired folder on the server.

You wont have the hierarchy in the VS solution but it wont matter after it is set up.

Quick note on the SVN locking, we experimented with locks via Ankh and although it was supported it gave no prompt when editing a locked file. It did say locked in source explorer and also in the file system but having to check each time was a liability.