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I am several hours in the game, I have lost a few battles so far, but I am proceeding nicely. Unfortunately it appears that where previously when lost a battle I would be returned to the starting location, now I always die and have to reload the game.
What is going on? Does my character have "lives" which I have lost and now I am screwed?
This question / problem has been solved by Garranimage
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trusteft: I am several hours in the game, I have lost a few battles so far, but I am proceeding nicely. Unfortunately it appears that where previously when lost a battle I would be returned to the starting location, now I always die and have to reload the game.
What is going on? Does my character have "lives" which I have lost and now I am screwed?
Afaik no. Maybe the game's saving point at the starting location is gone, corrupt or whatever, so the game can't properly reset to this point. It might resolve itself when you proceed further, but you could also try an older savegame for testing and/or replay some parts.

Or this. Good point Garran.
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Post edited January 24, 2015 by DeMignon
Certain battles - particularly those 'inside' items and boss fights - are do or die. If you lose one of those, it's game over.