I wouldn't mind combat simply continuing while a character is downed. The assumption being that if someone in your party is dying, then the situation is very much not yet resolved.
My thoughts exactly, glad to see this has been mentioned.
Also no story time while people are bleeding out, I'm looking at you Gale and your pompous backup plan when you die. Thanks to his windbagging my main character bled out while I was stuck trying to tell him to shut up. rabble rabble rabble! (ok, so I kicked him out of that party, but let him into the next one I made, still wary of him though!)