However, I've had an idea that involves offline play when you disconnect. Let's say that when the connection is lost instead of showing you a CONNECTION LOST (Countdown to your death: 60 seconds! Have fun waiting!) box in the screen, the game just goes on offline just like Starcraft 2 campaign, but you will be notified that the connection was lost and a big counter will appear, giving you 60 secs (Arbitrary time here) to flee and run to town (Or safety) if you are in danger.
During this time you are not allowed to pick up items, gain experience, complete quests, talk to npc's, change your stats, skills and inventory. When the connection is reestablished the only things that the server will take into account will be life, mana, and location.
Note that this discourages cheating since there's no way to progress in the game while you are disconnected (No XP, no quests, no Items, etc.), and will most likely solve the problem.
Say what you think of this, and/or other possible solutions!
See you in Sanctuary!