There was a forum member a couple of years back that built a 3d enviroment and used a 2d sprite for the main character. i don't remember his name...and the link to the thread is buried, but ill try to find it, but to answer your question...yes.

it will take alot of work...but be for warned...making a rpg is some tough work.read plenty of tutorials and don't be afried to get some negative feedback if something needs to be fixed and ask plenty of questions