I just logged on and attacked a bear (didn't even scratch him, did you make them tougher?) and it killed me. I never turned into a ghost and there is no respawn timer. I seem to be permadead.
edit: I just tried it with another character. Same issue. He's dead and doesn't appear as a ghost and won't respawn.
Also, I was able to kill a bear this time. Not sure why previously I wasn't registering any damage. Maybe the health bar for the bear wasn't updating properly. I definitely scored some hits though judging by his reactions.
By the way, the two characters that are currently dead are Walter and Walter Taylor.