Forktong --

I'm not 100% sure how you implemented things but I once defined loot tables for a mud and I don't remember it being too painful - we basically built our tables of different types of items (fruit, armor, ...) with probability based on difficulty and then we could build tables of tables with probability of the type of item based off area and location type.
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It is not a perfect system (also we generated much less loot than D:OS is generating (which seems a bit high right now). The biggest pain was too much crap (fillers) but in the end I don't remember too many complaints. Hum. I should find a play ground to play with some ideas.