So we tried this again and his character got hosed (again). We were both fighting druids (Q1M4), he died, I killed the druid but was poisoned, and when I drank a potion of cure poison my game crashed. He got stuck in the spawn point with no way to get to his corpse.

The "fix" was each of us creating new characters and starting over. On our second Q1 playthrough we didn't have any crashes and we did the whole storyline. That kind of makes me wonder if it was somehow related to my character, because he had tried two different characters with my one and it kept crashing. I was a Sailor and he tried an Archer and Priest. I could upload that character if you think it would help any. (On our second playthrough, I was a Paladin and him a Mage.)
Also, I noticed that "stdout.txt" gets written in the A&A folder. When we experience a crash, would it help for us to send those to you? They can get pretty massive...one time mine was ~72MB!