Combat is laughably pointless if you miss an area and go back and are even 2 levels above the enemies, and on EASY with my level 10s, running into a pack of level 12s (an easy thing to do) almost wiped me.
Level based penalties are antithetical to the freedom aspect of playing an rpg. If I wanted to run down a corridor, I'd play fps games.
I realize maybe you didn't make it so that leveling actually results in enough improvement of natural skills and stats. I can tell that just from the dearth of points I have to spread between the many skills needed to fully enjoy the game. And maybe it's too late to change that.
But you could at least patch it so that the level scaling is only fractionally as important as it currently stands.
