I agree with you, however, there is something about isometric (if you have a good artist) that adds more style and flavor that full 3D. Of course this is just my opinion, but I feel it's nicer to look at.
This isn't true at all. What JTippett was getting at, I think, is that there is no reason to implement 2 different rendering structures in your game: 1 pure 2D isometric structure, and 1 3D structure for the characters. You can implement the isometric scene as a 3D scene, and it will be visually identical to the 2D isometric scene. You can use the same assets (mapped to billboards or crude geometry and placed in the 3D scene) as you would for the pure 2D. That way, the scene and the characters will be well-integrated; ie, no strange issues that might crop up from trying to shoe-horn a 3D character into a flat stack of layered 2D sprites, which is the way that isometric was implemented traditionally. A flat stack of layered sprites has no scene depth, so ensuring that the 3D parts that do have depth are rendered correctly in such a scene can be problematic, and solving the problem is pointless given that the best fix (ie, switching to a full 3D representation for everything) is so trivial.
I think I understand what you mean. And I get the feeling that this isometric 2d feel I want can be achieved by many game engines, including 3d ones as you mentionned. I am not very knowledgable when it comes to the many game engines that are available, and I feel overwhelmed by the options. I was really hoping for an engine that sort of aimed for this style, but I am getting the feeling that I just need to stick with one and then change the code to fit my needs, correct?
In any case, thank you very much for the helpful info!
On any kind of modern hardware, the traditional methods for doing an isometric viewpoint are very out-dated. Modern graphics hardware isn't optimized anymore for the 2D cases, at least not nearly to the extent that they are optimized for 3D. Sure, you can achieve excellent performance doing the traditional layered sprites, but if your goal is to mix in 3D characters, then just go full 3D. Map your level assets to billboards or other appropriate geometry as needed, set the camera to an orthographic projection with the appropriate view angle, and boom. Isometric scene. It's so easy to do in any relatively modern 3D graphics package that it hardly warrants any kind of in-depth discussion.