Index: D:/Source/trunk/L2_Gameserver/java/net/sf/l2j/gameserver/model/L2PcInstance.java
===================================================================
--- D:/Source/trunk/L2_Gameserver/java/net/sf/l2j/gameserver/model/L2PcInstance.java	(revision 2211)
+++ D:/Source/trunk/L2_Gameserver/java/net/sf/l2j/gameserver/model/L2PcInstance.java	(working copy)
@@ -2391,7 +2391,8 @@
 	 */
 	public void doDie(L2Character killer)
 	{
-        // Kill the L2PcInstance
+		int lostXP=0;  //useful for new karma reduction...Team Olympus.
+		// Kill the L2PcInstance
         super.doDie(killer);
 
         if (killer != null)
@@ -2401,15 +2402,15 @@
             {
                 if (!ZoneManager.getInstance().checkIfInZonePvP(this) && (getSkillLevel(L2Skill.SKILL_LUCKY) < 0 || getStat().getLevel() > 4))
                     if(killer instanceof L2PcInstance && ((L2PcInstance)killer).getClan() != null && this.getClan() != null && this.getClan().isAtWarWith(((L2PcInstance)killer).getClanId()))
-                        deathPenalty(true);
+                    	lostXP=deathPenalty(true);
                     else
-                        deathPenalty(false);
+                    	lostXP=deathPenalty(false);
             }
 
             onDieDropItem(killer);  // Check if any item should be dropped
         }
 
-        if (killer != this) onDieUpdateKarma();
+        if (killer != this) onDieUpdateKarma(lostXP);
         setPvpFlag(0);              // Clear the pvp flag
 
         // Unsummon the Pet
@@ -2661,21 +2662,42 @@
         }
     }
 
-    private void onDieUpdateKarma()
+    private void onDieUpdateKarma(int lostXP)
     {
         // KARMA LOSS FOR DEAD PLAYER
         // when a PKer gets killed by another player or a L2MonsterInstance, it loseq a certain amount of Karma based on their level.
-        // this (with defaults) results in a level 1 losing about ~2 karma per death, and a lvl 70 loses about 11760 karma per death...
-        // You lose karma as long as you were not in a pvp zone and you did not kill urself.
+    	//new karma loss code by team Olympus:
+    	//Lose karma as a fraction of the XP you lost upon dying (ignoring how much 
+    	//of that XP might be returned by ressurection).
+    	//NOTE: This also provides an elegant solution for no karma loss in PvP zones
+    	//and for limitted karma loss in sieges (as specified in discussions from retail).
+    	// old karma loss, used when options do not allow XP loss on death:
+    	// when a PKer gets killed by another player or a L2MonsterInstance, it loseq a certain amount of Karma based on their level.
+    	// You lose karma as long as you were not in a pvp zone and you did not kill urself.
         if ( getKarma() > 0 && !ZoneManager.getInstance().checkIfInZonePvP(this) )
         {
-            // this formula seems to work relatively well:
-            // baseKarma * thisLVL * (thisLVL/100)
-            // Calculate the new Karma of the attacker : newKarma = baseKarma*pkCountMulti*lvlDiffMulti
-            double karmaLost = Config.KARMA_LOST_BASE;
-            karmaLost *= getLevel(); // multiply by char lvl
-            karmaLost *= (getLevel() / 100); // divide by 0.charLVL
-            karmaLost = Math.round(karmaLost);
+
+        	int karmaLost = 0;
+        	if (Config.ALT_GAME_DELEVEL)
+        	{
+        		karmaLost = lostXP/260;                //this 260 seems to work quite accurately.
+        		// leave karmalost to 0 only if 0 xp was lost 
+        		// This works greate with arena (0 xp loss, 0 karma loss),
+        		// sieges (reduced xp loss, reduced karma loss as described in official forums), 
+        		// and normal zones... 
+        		if (karmaLost ==0  && lostXP >0)
+        			karmaLost = 1;
+        	}
+        	else
+        	{
+        		// this formula seems to work relatively well:
+        		// baseKarma * thisLVL * (thisLVL/100)
+        		// Calculate the new Karma of the attacker : newKarma = baseKarma*pkCountMulti*lvlDiffMulti
+        		karmaLost = Config.KARMA_LOST_BASE;
+        		karmaLost *= getLevel(); // multiply by char lvl
+        		karmaLost *= (int)(getLevel() / 100); // divide by 0.charLVL
+        		karmaLost = Math.round(karmaLost);
+        	}
             if ( karmaLost < 0 ) karmaLost = 1;
 
             // Decrease Karma of the L2PcInstance and Send it a Server->Client StatusUpdate packet with Karma and PvP Flag if necessary
@@ -2812,8 +2834,9 @@
 	 * <li>Set the new Experience value of the L2PcInstance and Decrease its level if necessary </li>
 	 * <li>Send a Server->Client StatusUpdate packet with its new Experience </li><BR><BR>
 	 *
+	 * <li>return the amount of XP lost, to be used for karma loss.
 	 */
-	public void deathPenalty(boolean atwar)
+    public int deathPenalty(boolean atwar)
     {
 	    // TODO Need Correct Penalty
 
@@ -2835,6 +2858,7 @@
 
 		// Set the new Experience value of the L2PcInstance
         getStat().addExp(-lostExp);
+        return lostExp;
 	}