The skeleton definitely needs some work drawing wise, but as you can see there are now bodies (corpses) in game.  Each ‘corpse’ contains the player’s full backpack, possibly 1 equipped non-looted item/up to 2 looted items.  I think the player will be able to right click on his/her corpse to pickup and auto re-equip at the same time.  If the player equips any item(s) into those slots, post-mortem, on the way back to the corpse and then tries to right click the corpse those items will remain in the corpse.  I am going to post some thoughts on death gameplay rules on the forums – come have a say.