A dumb question but .... you mention how processor heavy the physics is. I was just wondering if it might not be possible to create a hybrid or blended use of physics. For example the player is struck and has the initial ragdoll effect which segues or blends into a standard death animation. In other words I have a standard animation for dying and so when player is hit he has a brief ragdoll effect which morphs to the start point for the regular animation -the physics is set up so the player rotation etc end matches the beginning of a standard animation.

Like I said may be dumb idea but what I mean is if you could have some of the realism of physics but reduce the overhead required by say reducing the actual physics calculations by half. Hope this was clear.