I've been using this house rule now for three sessions and I'm liking it. Creatures have 3/4 their normal hitpoints and deal +1/2 their level in damage. Crits deal max + 1d10.
This works well primarily at paragon + level where PCs have a lot of ways to mitigate damage. Battles are fast and brutal. Finally a really hard hit can bloody a fighter in one round.
Anyway, its working well for me and I wanted to share.
If you are giving monsters 3/4 of their normal hit points, it would make sense for monsters to do about 4/3 normal damage, assuming that monsters are already balanced in terms of HP/damage combined, and the problem is their relative balance of offense/defense. The actual number should probably be a little less than this, since higher damage relative to hit points gives monsters more of a shot at winning a fight due to a series of rolls going their way.
A 11th level monster is supposed to do 2d6+5, using the DMG’s “normal damage expression” table. For now, I’ll take this table's numbers as appropriately chosen, and I’ll also assume that the monsters in the MM meet this criterion though these are both false to some degree. In this case, +1/3 of 12 damage is +4, so level 11 monsters should get +4 damage.
More generally, +1/3 to damage over the DMG’s normal damage expression guidelines would be approximately Bonus Damage= 2+ Level/5. At high levels, +1/2 level in damage rapidly outstrips this formula (+8 damage at level 30 by the formula).
Brutes, who use the high damage table should get roughly Bonus Damage=3+Level/5 instead, since their base numbers are higher. This number should be lower for attacks that use the low damage table, about (9 + Level)/6 bonus damage.