The characters are remnants of an occult war in a city that sits between the realms of the waking and dreaming world. War machines lie strewn across the streets, but these are not obstacles, they are sources of potential strength. The characters themselves are cobbled together war machines...their minds embedded in a biomechanical matrix, constantly require mystical energy to remain psychically active, and more mystical energy to empower their bio-mechanical bodies.
The characters awaken as the last of the living soldiers from ancient warring empires take their final stands against one another. They have no memories of the war, and must struggle to make sense of the events around them as the dwindling resources of the war (and their chance at survival) is scavenged by others like them, and desperately reclaimed by the living soldiers who were once their masters.
Around them are new limbs to attach to their frames, new frames to attach their biomechanical matrixes into, new psychic programs to upgrade their biomechanical matrixes (at the risk of overwriting their existing skills and identies). Most importantly, there are sources of power that need to be claimed and held, to gain control over the city, and create peace and stability long enough to understand what the hell is going on.
I think I've got a core idea for this Fantasy RPG design challenge.