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.
Any particular reason that you insist the world be 2D, and in no way rendered in 3D? All this does is needlessly complicate the rendering and the interaction between the 2D world and 3D character.
Thanks! I'll try looking into these two!
As far as which engine would be best, I've done something similar using Ogre3D. Irrlicht as well.
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?
One thing to remember about general-case 3D engines, though, is that they work decently in the general case, but perhaps not so well for specific cases like this; or at least, not as well as a solution you develop specifically for the problem. A general 3D engine does a lot of culling and sorting and LOD determination that you can optimize out for an isometric game, since you already know the best order to draw the objects (back to front) and can easily make a visibility determination based simply on the location of the camera. Still, even with the relative inefficiency of using a general 3D engine, you should be able to achieve acceptable performance given that an isometric scene is a very, very simple scene to draw.
In any case, thank you very much for the helpful info!