I know it can but it's the sheer term that puts most of the "non hardcore" playerbase off. It's just how it is. I would love permadeath just for the kicks and the extra thrills, but it's the general playerbase that will suffer because of it. Experiencing literally hundreds of different MMO's I know how MMO community works nowadays.
I would suggest using UDK (Unreal development kit) for making the game. It's an easy to use game development software once you spend a few hours working on it. No real programming skills needed for the basic stuff. + graphics are win
You don't have to fight all the time in this game. Training, dueling, making money, crafting is what you have to do for a day. And when the war times comes you gotta be ready to survive.
Strating all over is not a big thing for a peasant. And for an average player it's 1 day job. If you are a tincan you don't die outside unless you are stupid. And if you die in a war people expect you to do great job in war.
Maybe we can think something like that: Stocking items in your house. When you born again you'll find your previous char's stocked items. If you are dead in a war and your side wins, your items will be automaticly saved to your newborn- it's your son.
I don't see any suffer. It's a game you don't fight with MOBs. Dueling and training is with practice swords don't kills you. So only way you die is go outside of the town defenceless, not with your friends -or a bandit trap. Other times you die in war...Uhmm i did tried to program some stuff before but with BASIC. I did a horse racing game before but i don't think i can make it. Is this thing creates stand-alones? You suggest me to do a MMO from "0" with that stuff? I'll give it a try and look what it is but it sounds impossible. Thank you for your suggestion tho.