Any problem with using the same setting?
It would feel a little derivative, no? I've gone through this before, though, probably ad several people's nauseam. The problem with LEW's Enworld is that the mapped local area is very large and very safe, as evidenced by the continued existence of old cities across it. All that nice world-building work contains the seeds of its own destruction. The local area is suitable for low level adventurers but must become either cartoonishly unrealistic or be changed beyond recognition (thereby becoming unsuitable for low level PCs) once we have a lot of higher level adventurers who need to fight terrible foes all the time. That's actually easily solvable, if high level PCs take advantage of their greater travel options, but would require mapping another area.
If you want my advice for a new living world: put a whacking great big wall across the middle of the local area. Base the adventurers in or near the wall. The low level PCs do their thing on one side of it; the higher level PCs gradually grow in confidence and venture to the other side, where the horrible things are. In either case, it's only a few days' journey to appropriate interesting challenges. Doesn't need to be a literal wall, of course.
And no offense, but serious questions:
Who is still playing LEW? (I do, and I knew the ones from HolyMan's game.)
A sadly small number of people. Could perhaps be turned around if we contacted (nearly) everyone on the inactive characters list and said "hey, remember LEW? We're dying. Feel like helping to save us by playing again?" Doubtful it could be turned around if we said "Hey, feel like spending a month entirely rewriting your old PC, assuming the concept even migrates, and waiting for new approval?" Yeah, right. They could as easily make an entirely new PC. And if we're going to start afresh, with a major loss of PC continuity, well, do it in a new world.
Why would they be wrecked?
Many reasons. Why is that so hard to believe? It's a different, even though closely related, system. Even the simple conflation of Listen and Spot to Perception screws up one of my characters - Keldar, who is slightly better than most at spotting things, but constantly has fragments of poems and songs circulating in his head, so almost never succeeds at a Listen check, quite deliberately. And who is about to take Human Paragon levels. And pick up a psionic cohort.
The oldest 3.5 game I'm playing in (played the character from level 1 to 4) has just converted to Pathfinder.
Well, great. But I don't see the relevance.
If you convert LEW to LPW, you've just reduced overall player choice, since now there's no 3.5 living world at all. If you add a new LW, then you're increasing choice. That's a better option,
even if the result is that interest in LPW indirectly leads to the final death of LEW.