There is a lot of talk about what should happen to a fallen hero and I would first like to say that I am not in favor of perma-death. The wound/recoup time is such a novel idea that it would ruin the charm of the heroes in fallen enchantress. What I would like to see is a little more severe consequences, so here is a list of ideas.

1. Longer re spawn times.
2. Production in your capital stops while hero is recovering. It takes energy to care for our wounded; more so than training a bunch of spearman I would think so why not halt production. 
3. Loss of experience. Not loss of level, but all experience you have gained since your last level is gone.
4. Possible loss of item/items, not all but a random amount. Maybe you can have the items drop where you died so you have to go back to get them, and some monsters will take them and carry them until they are defeated.
5.If multiple heroes die then only one can recover at a time. Think along the lines of the production que, 

That is it. I love the immortal aspect of heroes, but I would like to see some more tension in certain battles. Losing a hero should mean something more than a chipped tooth, though that is cool all the same.