A brick of thought smashed right into my tiny little brainsponge and became an IDEA!
Guild Settings:
Death Penalty -------------|XP| ----|Neg lvl|----(Toggle)
_______________________________________
Item Damage -------------|Low| ---|Extremely High|------(List)
Repair Cost --------------|Low|---- |Extremely High|
Items damaged on death --|No|-----|Always|
Neg Lvl on Death ---------|No| ----|Yes|
Quest Type Preference(Loot Settings?):
|Raids| ----------------|Quests|
More named items ----More random items
and other things.
Yes it would change PuG dynamics, but it would encourage people to PuG again.