What is the "other contender" other than C?

Given it's immaturity and the learning curve it has, it wasn't a contender when Parrot was started, but I think that with the advent of a GCC backend running on Linux, Digital Mars D, shows considerable promise for future cross-platform projects.

It has everything you need from C, low-level access to the hardware including inline assembler support, fast optimising compiler etc. It also has built-in memory management & garbage collection, objects, strings, hashes, types, contracts, templates, mixins, etc. etc. and can link directly to C code without requiring "wrappers". Or, all the good bits from C++ without the anachronisms or complexity.

I was wondering ... that maybe it could be bootstrapped as the parser and emit Parrot code

From what I've seen and understood, it almost certainly could produce Parrot code directly. The only downside of that is the 40 MB download of GHC.

Then again, if it gets competent enough that it could be used to write the P6 compiler in P6, you could end up with it generating a P6 compiler that could compile itself?. Such things have been done before.