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Okay, some interesting news...
First off, after a lot of thinking I've decided to finish The Lost City of Malathedra, in it's current form (the 2D/3D mix), Brian Linton and I have gotten back together on the project and we're reworking it a bit to make it more manageable for a swift-ish finish release.
In the mean time I'm still working on my First Person Adventure engine with physics, and I've finally moved beyond the deep inner mechanics, as you can see above I've got objects sitting on a floor, the scene is 6x Multisampled, and uses per pixel shading with a single directional light source; each object is an instance of an Actor, which is referencable via script, each object is a physics body, and so you get very interesting reactions as you play with the scene.
This is really the first step, next will come camera control via locking to a specific actor (the main character), and using the mouse and keyboard to move that actor around.