iserith
Magic Wordsmith
You're correct, its not very often that I come across this. And I guess in a sense the extreme cost is a serious hurdle early on to low level parties/characters. I misspoke and placed too much emphasis on difficulty. I should have mentioned that I was looking for more thematic suggestions to change/modify it from "bring this large bag of money (diamonds) to this dude and your friend will be alive again) to a more difficult series of hurdles for flavor sake. So I guess my request is more of flavor suggestions that are tougher than what's currently listed.
As far as new characters goes, they start 2 or 3 levels behind and lose the equipment of their original tool. We homebrewed in that death doesn't remove attunement, but I've also loosened up a tad on the magic items being rare, at least later on in the game when the party moves from fighting kobolds and goblins to giants and dragons. So in a sense if a character dies all those really cool items are locked to them and can't just be passed around - unless you bring them back via a resurrection.
Okay, so it looks like the incentive to resurrect the character - aside from personal attachment - is you get to keep your items and you don't lose 2-3 levels. That's a decent enough encouragement to make use of raise dead in my view.
I would suggest that in addition to the cost and penalty incurred for use of such spells that Death itself demands the resurrected character perform a particular quest of its choosing in a certain amount of time. If the character reneges on the deal or fails to complete the quest in time, permanent death and eternal damnation follows. To complicate matters, make sure the quests the characters are going on are already time sensitive so that they have to start prioritizing and getting creative to get everything on their plate done before it's too late.