I am not sure if a nerf or multitude of buffs is more appropriate in this case. All races with real racial weapons (dwarf, drow and elf) could receive a slight bump in those racial weaopns and several racial prestige enhancements could be released such as dwarven defender, drow scorpion, juggernaut, and dragonmarks (useful for halfling and human). The half-elve and half-orc races would receive none of these bumps and all would be more balanced again in the DDO world. I think that would work.