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[Lord Mhoram]

Another way of looking at it, stolen from serials.

If you have a TPK, rout, disaster, but don't want to start over....

Start the next session as a "This is how they got out of it" like in all the old Pulp serials - have the cliffhanger where the main character appears dead at the end of one, and the explanation of why he really isn't at the start of the next.

I think that could work well as a restart point without completely destroying immersion.