OK, I'm confused. You normally roll initiative at the start of the battle. You either move on your initiative, or you delay. If you delay, when you move later, your place in the order changes. Are you modifying those rules so, I can move at 5 on the first round, then 10 on the second, and get two actions before the fellow moving at 8 gets another one? So, on 5, I let go of the sack I'm carrying (swift or free action, I assume) and start a full round spell. The guy who moved on 8 can't do anything about it since I'll finish on 10 next round.
Can I just delay dropping the sack until after he moves, then start my spell so it finishes 5 higher (and before he moves again) in initiative order?
A couple of things that prevent this from occurring with the houserules I use:
1. Not sure why you'd think you'd go 5 higher in your example. If you dropped a from a heavy load down to a light load, your -6 Init penalty would go away (and you'd end up with a new Init of 11). Drop from Med to Light and you'd lose a -3 penalty. Drop from heavy to medium and you'd go from a -6 penalty to a -3 penalty.
2. Stuff can be dropped as a free action only if it is hand-held; so the sack could be dropped as a free action (assuming you are carrying it by hand), but dropping a backpack is a move action (ever try to take off a school backpack while wearing a winter coat or try to take off a loaded hiking backpack? It takes a bit of time).
3. Your example of casting a full round spell starting in round 1 would still end on initiative position 5 the 2nd round regardless of dropping a sack or ditching a pack. It is a full round, and in round 1, you are starting at a initiative position of 5; A full round means you'll end just prior to position 5 the next round (i.e. a full 6 seconds later), so in this case, you won't be able to take advantage of lowering your encumbrance until after you've
completed the action that you started at the lower initiative position. If you had dropped a sack and conducted a charge (a full attack and as such, a full-round action), it'd be the same thing.
4. If you dropped a sack, you could move, attack, and then do the same thing sooner in round 2 because those action are not full-round actions (how much sooner dependent upon how much your encumbrance changed). If you had to get out of your backpack, you could still attack and take a 5-ft. step, and then conduct any actions sooner in round 2.
5. I don't follow your logic on using a delay. You can only delay until the end of the round you are currently in unless you don't mind losing an action, so if you waited from initiative position 5 in round 1 all the way down to initiative position 10 in round 2 and dropped a sack as a free action, you'd be starting your spell on initiative position 10 in round 2, ending just prior to initiative position 10 in round 3 with the casting of your full-round spell. In round 4, you'd end up higher at initiative position 10+x. Delaying doesn't buy you anything because you end up losing an action in comparison to the number of actions your opponent can take.
Here's a breakdown, with your guy with an Init of 5 (-6 penalty included for carrying a heavy load in a sack), the dropping of which will take you down to a light load, and his opponent with an Init of 10 with a light load:
Round Init Action
------ ---- -------
1 10 Opponent Acts
1 5 You drop your sack and begin casting a full-round spell
2 10 Opponent acts (he cannot conduct an AoO because you started in rd 1)
2 5+ Your spell goes off
2 5 You can take your normal action this round
3 11 You can act this round
3 10 Your opponent acts
As you can see - you don't get any extra actions, but once your encumbrance is lower, you can act sooner.
Here's the same thing, but with you taking a delay to happen at the very bottom of the initiative order:
Round Init Action
------ ---- -------
1 10 Opponent Acts
1 5 You delay to initiative position 1
1 1 You drop your sack and begin casting a full-round spell
2 10 Opponent acts (he cannot conduct an AoO)
2 1+ Your spell goes off
2 1 You can take your normal action this round
3 10 Your opponent acts
3 7 You act
As you can see - delaying gets you nothing here - you still end up going after your opponent each round.
Here's the same thing, but with you taking a delay to happen just prior to your opponent:
Round Init Action
------ ---- -------
1 10 Opponent Acts
1 5 You delay
2 11 You drop your sack and begin casting a full-round spell
2 10 Opponent acts (he cannot conduct an AoO)
3 11+ Your spell goes off
3 11 You can take your normal action this round
3 10 Your opponent acts
4 17 You act
4 10 Opponent acts
As you can see - your opponent can take 4 actions to your 3 due to you delaying to just prior to him, so it gets you less than nothing...