I would personally be for a 'Dark Age' Period with a reduced time. That way everyone can keep their characters (unless they were very old) but also it would be a suitable lore explanation for the reduction in numbers/exit of the regent.
Also I would like to start a discussion on how we will explain Cody's world-edit. I've made a post about it here:
http://www.hermertia.com/viewtopic.php?f=9&t=70The summary is that actions in Ikwe led to a widespread collapse of the city and the departure of The Regent. Given his integral part in international affairs his departure created a period of instability resulting in the 'Dark Ages' around large portions of the empire as world leaders convened on the Imperial City.
I would also be pro the idea of an Arson attack on libraries to explain the loss of also of the wiki/history. I don't think the 'Dark Ages' were particularly dark as the serve has been up longer than the website with development in the Imperial City.