Gyson - sorry, I didn't see your OP edit earlier, but something like that system could work as well.
My only problem (if I'm understanding you correctly when you say "Increased levels of temporary durability loss require higher levels of the Repair skill") is that in your system, you could have a situation where you'd be able to repair an item (fully?) at a certain ability level when it's at 31% durability, but would no longer be able to repair it at all when it drops to 30%. If that's what you're saying, it would seem kind of weird - but correct me if I'm wrong.
Also, I would add the ability to slightly enhance the effectiveness of equipment beyond its "100%" value at Repair level 5. It would spice things up a bit, and really be an appropriate reward for players willing to invest so many ability points.
