I don't know where I read it, but someone was trying to start a Ptolus campaign using a mixture between the standard D&D rules and IH. If I remember correctly, the premise was that the players are a new breed of heroes, i.e. the _only_ ones using the Iron Heroes core classes, while everyone else is a D&D based character.
Magic items would pose a problem, but the rest could work quite fine.
I've been converting some Forgotten Realms stuff to Iron Heroes, where the general level of magic is pretty high, too. Generally I tend to go with the spirit of thing, instead of a straight conversion. Take the much-hated Elminster as an example. He's two things: The "Sage of Shadowdale", i.e. a much-used information resource for fledgling players, and the most powerful wizard of the realms.
The pinnacle of wizardry endeavors would just be a high-level character of whatever sorcerous class I chose to use (Arcanist, Warlock ...). His absolute power level would probably drop significantly, but relative to the world itself he would stay the same.
If I just want to stick with the "Sage" stuff, any class with high enough Knowledge skills would suffice, so why bother with anything else.
Iron Heroes itself can be mixed-and-matched with various levels of magic. So the first issue one has to decide is what will both average and maximum magic be. Converting Ptolus to a rather mundane city is definitely possible, with almost no magical characters at all. It would require quite some effort though...
Coming up with a half-way decent mixture of IH and D&D (or AE) would make things easier.