It is permitted to recreate the "same" character with different mechanics, in order to change the character in ways beyond what the one-time overhaul allows. (For instance, turning a wizard into a sorceror, or an orc into a half-orc.) This can be accompanied by an explanation in-game (such as revealing that the orc has a hidden human parent) or considered a ret-con (such as declaring that the wizard was always a sorceror, and building him as a wizard in the first place was a mistake).
If you wish, you can mark your retired PC as public, effectively turning him into an NPC that DMs can use in their adventures, and possibly develop further. (You should not do this if you recreate the same character, of course.)
The retirement rule is intended to give players a way of gracefully escaping from characters they are tired of, or that aren't as much fun as they had hoped, or who have accomplished their character goals, or were not built in a way that truly reflects the player's conception. It is not a license to continually optimize the same character, get out of permanent conditions for free, or choose better items for the same character. Players who abuse this rule may find themselves warned by the judges, or their replacement characters may be denied approval. When in doubt, ask a judge.
