OK, it is now Saturday and we have the vocal majority to go with.
First - If the next session is not a TPK and somebody gets out alive, we will poll the group and find out who has the most exp. We will then bump everyone up to the minimum exp to be an equitable level. It will be up to you guys to stop and train to make use of that exp.
Second - Experience earned is carried over to whichever PC is being played.
Third - We end up with a contradiction for replacement characters. I knew something didn't seem quite right when I posted above. We don't need to reset replacement characters to the average of the party. The second point above logically dictates that replacement characters pick up from where the deceased character left off. However, replacement characters still suffer a two negative level affect as they are integrated into the group. This is earned off at one negative level every two sessions ( Four sessions to get rid of both of them.)
Fourth - Brand new additions to the group (such as from a new player) will start a character at the average of the party and begin with a two negative level affect in the same manner as replacement characters.
It sounds a bit complicated, but I think it is an improvement and easier to manage in the long term. Thank you to everyone that participated in the discussion.