I have been hearing about Pools of Darkness basically requiring a human party due to demi-human level limits, so I have been wondering whether the following challenge would be possible. Rules are as follows:
1. Humans are forbidden; everyone must be a demihuman
2. Thieves are forbidden (this includes thief multiclasses)
3. Using hacks, cheat programs or glitches to get around level limits is forbidden.

If not, I am wondering whether this fails because the enemies become unmanageable (even for an expert player) or because there is some point a thief is mandatory.

Yes, it is unmanageable.

You don't need a thief--there's a quest in the optional challenge where you do, but the main game is easily winnable without a thief.

However, the demihuman level limits effectively negate any sort of use of demihumans except as multiclass thieves. The highest level a demihuman can achieve is 11 for elf mages, and after that 9 for dwarf fighters. Keep in mind starting level in Pools is 13, and characters should be in the 30s to finish the game.

An 11th level elven mage will not be able to affect Drow or Pets of Kalistes with spells (drow are 70-80% magic resistant, with that decreasing by 5% for every level *over* 11, and Pets are 85%), and will not be able to cast Delayed Blast Fireball, which has no casting time (this was a variation from standard AD&D). He or she will not be able to stack up enough Ice Storms or Hold Monster spells to help with Bits of Moander.

A 9th level dwarven fighter with a 23 Strength from a Girdle of Giant Strength wielding a +4 weapon has a THAC0 of 3, whereas a 17th level human fighter (the point at which THAC0 stops falling) has a THAC0 of -5. At most, he can have 15*9=135 hitpoints, whereas humans can have 200 or so.

Finally, a half-elf cleric can only get to level 5, which means he can't even neutralize poison, let alone raise the dead, reverse level draining, or throw Blade Barriers.

If you wanted to try it as a challenge the way people try to beat Nethack without killing anything, go ahead, but I wouldn't recommend it for the beginning or intermediate player.

The game was criticized by many as basically showing how broken AD&D is at upper levels--Elminster was 26th level in 1st edition, for example. I found it great fun, personally, but I enjoy over-the-top stuff.

I found even Curse of the Azure Bonds too hard with demi-humans. When I met those Wyverns in the second dungeon it was basically game over, since my Half-Elf Cleric was not able to cast Neutralize Poison.

As a rule of thumb in all Gold Box games the first game in a series is fine with whatever race you use but after that level restrictions makes it very hard if not impossible to finish.

Funny how much we used to tollerate back then eh? Imagine if you were a WoW player nowadays and realised after levelling to 60 that your Elf hunter couldn't go any higher and level 90+ was only available to humans. Arf!

For me it's the other way around.
Before there were choices that mattered and true differences. Now everything is viable and works just as good if you change your gameplay somewhat accordingly. There are safeties everywhere so you can't bork things up too much.

It's the same both in strategy and roleplaying games now and I find that boring.

Edit: Back then you actually HAD to check things before you started playing. Now gamers just start fooling around and rage if the game let's them do utterly stupid things. "Waaaah the game let me lose! OMG WTF it sucks so hard!"

But the problem was that when you started Pool of Radiance you didn't know all the racial caps!
The manual only listed the caps for that specific game, not the ultimate caps.

Personally, I think the real solution to the level limit issue is as follows:

Balance the races so there is a reason (at 1st level) to pick humans.

Allow humans to multi-class, and get rid of dual-classing.

Each class should have 3 caps per game: a single class cap, a double class cap, and a triple class cap. (Alternatively, use an XP cap like the Baldur's Gate games do). These caps should be based on the specific game and should increase throughout the series.

To me, it makes sense to limit advancement of multi-class characters more than single-class characters, but it does not make sense to limit advancement of single-class demihumans more than single-class humans.

Another interesting idea, of course, would be the race-as-class idea that was used in ancient D&D. Essentially, Elf, Dwarf, Gnome, and Halfling would be classes with their own abilities, and then you only need to balance classes, not races. (There are tradeoffs here, as that may make different Elves too similar to each other.)

They did many of the things you suggest. It was called 3rd edition. ;) (Did pretty well, too--not trying to make fun, you pointed out a lot of weaknesses in the game rules they then went on to fix.)

Seriously, they're old games. You might try some of the FRUA mods that have been hacked to allow higher demihuman level limits (what does Ray Dyer's Realm do?) if you want gold-box combat with more reasonable level limits.

That's true. Well I guess they didn't think they would make more games in the serie or something.

Third edition isn't perfect, however. For example, multiclass spellcasters (like my favorite, the cleric/mage) just aren't viable in 3rd edition without a prestige class made to try and patch this flaw. While it makes sense for multi-class characters to be more limited in advancement, half the level is too much of a handicap.

As I mentioned in another thread, the Bishop class in the Wizardry series (except the multiple-of-4 games) suffers from this issue. In Wizardry 1-3 and 5, until level 16 (a level higher than the expected endgame level), a Bishop doesn't know more spells than a Priest or Mage, and the spells the Bishop does know are weaker. As a result, Bishops are basically useless except for their ability to identify items.

One other flaw of 3rd edition: having to make more choices at level up. Sometimes the option is nice, but sometimes I want to get back to the gameplay. (This sort of issue is why leveling up in Lords of Xulima became quite stressful for me.)

Also, 3rd edition doesn't implement race-as-class.

One interesting idea I just thought about: race-as-class combined with dual-classing. The idea is that you would be allowed to dual-class, say, from Elf to Cleric. With 1e/2e style dual-classing rules, this could actually work, I think.

I think a more viable challenge might be to use Gold Box Companion to allow the demihumans to get up to AD&D 2nd edition level limits. In the 2nd edition rules, dwarves get up to 15th level as fighters, elves to 15th level as mages and half-elves somewhere like 14th level as clerics. And that is even before the optional rule of up to +4 levels if the prime requisite is high (up to 19).

The last game of the Krynn trilogy (Dark Queen of Krynn) greatly liberalized the level limits. As a result, demi-human and multi-classes were more viable. In my opinion it was by far the best gold box game - sad it's not available here.

What do you call this, then?
http://www.gog.com/game/dungeons_dragons_krynn_series

Awesome - you just made my day. Not sure when they added it, but this is great.