You could implement a form of resurrection as the true death, causing you to lose your form, power, and equipment as you are reborn a mortal and have to live that life until you become undead again; but you would retain some things from that past life such as knowledge with regard to combat technique, spellcraft, and crafting proficiency. You'd have to rebuild your stats and either recreate or reclaim your gear, but you would not be starting from zero.
Can we get an update on this? (or if it was released and I missed it, could you explained it again?/link to it)This is a great idea! We have something rather radical in mind for true death that we will probably roll out in the next few months. Let's revisit this concept when we do!