So, death penalty ideas: Dropping all your ores/harvestable materials. The entire point of the expeditions is collecting the stuff, and dropping equipment is a really harsh penalty, so this should work out well. Perhaps drop them in a pot that is spawned on death, so stuff that is hard to find like diamonds are not gone forever.
General making it more difficult to reach the demonite tier would be good. Make gold equipment besides the pick something to strive for. And giving many of the low-tier materials many different uses, like iron for chests and chains(although all common metals should be available for those roles, like golden chains because fuck I'm rich).
I have a few ideas as well.
Force the players to only put accessories in the accessory slots. As in, you either replace a current accessory or you can't pick it up. (you can however deposit accessories in chests.)
Reduce light radius for all items, especially armor and weapons.
Reduce Mana Costs, but also reduce mana regen.
Reduce Damage HP regen from bands and make potions heal over time.
Give mirrors a longer cast time, or have it require mana.
Decrease drop rates for all rare items.
Make most enemies able to open doors, some able to destroy the door outright.
Also servers work again. But I'm currently hosting privately for a friend.