Thanks for the great feedback and ideas. I can see how some of my original suggestions would need tweaking, especially in the later acts which I haven't experienced yet. Much like D&D, I can see that in later levels, the loss of equipment is pretty much a fate as bad as death. Since this game is very much influced by WoW, according to the interview with the author... perhaps another WoW-influenced mechanic may help balance out the proposed equipment breakage rule: Equipment Repair.
Equipment Repair: When your _________ broke, so did your confidence. Time to consult a professional. This is one-of-a-kind equipment that is going to require serious skills and components to repair, so it won't be cheap. Add the sum of numerical values for Speed, Brawn, Magic, and Armor attributes of the equipment you wish to repair. Add an additional value of 10 for each Ability assigned to the equipment. Take this sum and multiply it by 10. The grand total is your repair bill, in Gold Coins, to restore this equipment to working condition.
That means that anything with an ability is going to cost at least 50 gold to repair... expensive in the early game, but probably worth the expense later on. Since I don't yet know what kind of wage a hero is likely to earn later on, the above values may need to be adjusted.
If you are thinking about playing the late game in hardcore mode with Perma-Death instead of (or in addition to) weapon breakage and repair, perhaps another alternate rule would be in order: Orb of Recall. Very Diablo-esque.
Orb of Recall: Once you become a Sthuper Sthpecial Hero wandering in the very dangerous places (at least Chapter 2), considering investing in this staple of professional heroes at your local retailer. 250 gold suggested manufacturer price, comes pre-filled to capacity with 1 charge. Recharges cost 100 gold. Usage: In an emergency, simply touch your Orb of Recall and tap your heels together 3 times (or wish *really* hard, in case you can't move)... you will be immediately transported back to the Map. Your Orb of Recall no longer has a charge and must be refilled before using again. Once used, a personal-use portal will remain open on the Map for your Hero(only) to transport back to the location you recently left. This personal-use portal will close immediately after being used.
Again... any thoughts are welcome. Take it easy ~ Apocryphim