Zombie absolutely should not be the undead racial, but would be okay if it was an optional talent that only the undead could choose.

AOE skills should check if a character is a zombie, so a healing ricochet automatically avoids them, and maybe something like contaminate would actually effect your zombie allies. And vampiric skills like blood bubble and mosquito swarm should still work. And if poison also helped regenerate your armor (at least a little bit), that would make it way better too. Between all those, zombie would be a lot more functional, while still requiring some dedication to make it work (which is okay I think, given it's a big change.)