Having read through that thread, NW_Kohaku, (well, some of it. It's long and I'm exhausted), I think it sounds reasonable. It seems it's less about dwarves being magical and more about dwarves manipulating and being influenced by various types of magical enviroments? There's a good deal more to your idea than that, but that's what I'm understanding right now, I think.
That's a fairly good synopsis of it. I also want to make a "magical biome" become more of an ecosystem that is run on magic.
The "evil biome" right now is a pretty good example of this, unlike the good or savage types, since evil zones have their own grass, shrubs, trees, animals, zombie plants, zombie animals, and other oddball stuff. It's certainly a place I wouldn't want to live, but it has the whole package. Right now, "good" means "Just like everywhere else but you get fairies, sunberries, and fluffy wamblers. Maybe a unicorn if you're well behaved."
Basically, I want to go beyond just that, and have varying levels of magical saturation that can gradually take over the ecosystem.
I don't want realistic cave-in mechanics.
Or rock bursts.
But both of those things sound dead sexy! I mean I'm the kind of guy who not only installed the dangerouse mining mod, leading to the death of any dwarf who dares dig through coal, but I also made similar effects for any aspestose based rock, and topped it off with poisen herbs. So one could say I like a hard game...
Giving miners black lung on the first seam of lignite they strike seems a little vindictive to me. Still, at least that's something that's controllable. You can just avoid coal if you want, or roll 1d6 to decide which lucky mining contestant gets specifically chosen to die horribly in his/her coal dust-soaked burrow, as opposed to all those other accidental ones.
As for cave-in mechanics, I can see liking them. There needs to be some reasonable means of displaying to the player, however, how much support needs to be built for any given thing, or how much weight is bearing down on a support.