|Begone foul demon!|
In a way, this is a good thing, I think. I started them out using the WB rules to simplify things since a couple of the players were newbies to tabletop RPGs. My intention all along though, was to roll the campaign over to Classic D&D using the Rules Cyclopedia - my rules set of choice. We'd discussed it recently and I was getting closer to doing some conversion work on their characters to start using the RC rules. The TPk actually gives us a chance to start fresh and the kids have ideas for new characters they want to try anyway. At the same time, the discussion of PC choices and what type of game they want to play has allowed me to further develop my view of just what kind of game world Trevail really is and I have some grist for new ideas now.
A TPK isn't a bad thing necessarily - don't be afraid to use it for a new beginning and turn it into a win-win situation for the DM and PCs!