2.99 has been released.
After a lot of consideration on the matter, I decided to make the early game harder. You now have a -15 penalty on protection and magical protection on level 1, -10 on level 2, -5 on level 3, and 0 on level 4-10. This way, the game from 4-10 is unchanged, but the initial few levels are a bit tougher. There should be moments where you are in a tough bind on level 1 now (less or more depending on your experience with the game).
I was thinking about a lot of alternatives, such as decreasing the overall health pool, but I wanted to limit the effect on the latter half of the game, which seems to play out exactly how I intended.
Note: the Mac version will be delayed until the 3rd/4th because I don't have my macbook with me at the moment.
Thanks again everyone for the feedback.
Edit:
Had to drop a patch that fixed some bugs. 2.99b is out on all platforms.