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...is this game on the verge of death, or is it very possible for someone to start off fresh

You can start fresh, but I'd recommend a class that has at least decent solo capability if you're going to do so. Most grouping chances will come from following the hotzones until you hit 60 at least. I still play, but have gotten bored with most of my upper level toons so I spend alot of time goofing around with low level twinks. I'm waiting for my account to expire in the middle of the month and going to LOTRO at the end of the month myself(I just don't have the time or money for 2 games at once), but I came back to EQ fresh 9 months ago and have really enjoyed it. If it wasn't for LOTRO coming out I'd still be plugging along on Maelin.

Was your account active after the server merges? If it was not, they offered free transfer to a new server after that merger for six months, but if you call up customer service and say you were not active during that six months and you want that free transfer now, they will give it to you, I know people who have done this. Then you could get onto the server you want with your old toons.