Diluting with unsweetened tea should work just fine. Since there's still plenty of sugar in the mix, the SCOBY will continue processing and generate more CO2 over time.
I've made a couple of batches of kombucha over the last month or two, and three cups of sugar per gallon seems like a lot. That's three tablespoons of sugar per cup. I've found that using one cup of sugar per gallon results in a slightly sweet kombucha after 10-12 days.
Hope that helps!