Could you point me to those? I would be interested in reading.

I've scripted view entities to interact with level geometry (and to depth sort with panels and other view entities). I can do the same for lights as far as using their direction, intensity, and color for shading, though I'm still working on how best to handle shadows. Simple drop shadows are do-able, but the level approach definitely has an advantage for any sort of stencil or dynamic.

How would you get around all characters occupying the same layer using the level approach? Multiple copies of your level with layered view cameras?

I've wondered why the level doesn't treat rays that travel on to 'infinity' as transparent and then show panels behind.