this is what i propose, instead of dying and losing everything, you pay a small "fee" of gold or something every time you die :D. perhaps your equipment would deteriorate slightly each time, thereby increasing the amount of this "fee" you would have to pay. this would cut down on losing good gear, and the frustration that comes with dying and having to relevel.
i think it would be perfect, it would create a stable economy we could rely on, while still remaining difficult. what do you think? :D.