Dragonslayer / Tony
Welcome to SCF.
The coding of games is not my realm however there are one or two guys that frequent this forum that will sure be able to help you, one of them is very active in the creation of a well known Isometric game called 'Sim City'.
I am not a KT user so I cannot verify if it is able to render diametric images, however I do know that Blender is very well used for this genre and has a m3g export facillity.
As far as detailing is concerned, it can be achieved with complex modeling, but that would just slow you down, creating detailed textures would be best IMO.
Now Makehuman may be free and all but the sizes are rediculously large and frankly too detailed for the perspectives and gaming requirements, I unfortunatey do not know of any alternatives besides creating ones own lower poly textured people.
If you however find any solutions or have a workflow that indeed works well please let us know as there lurks many interested folks on these forums.
