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Evil Known Worldby Andrew Theisen
Ylaruam: Go full bore Arabian Knights with this place (by way of Ray Harryhausen). I'm talking evil wizards, animated skeletons, etc. You could even combine this with John's evil religious empire above.
Alfheim: Make the elves sinister and evil, the woods dark and foreboding. The Fey races become the Unseelie Court.
Ethengar: Make them the barbaric Mongols of ancient tales- just brutal and bloodthirsty pagans. Take the worst descriptions of them by middle ages historians and expound upon that.
Northern Reaches: This pretty much goes hand in hand with the Ethengars; just play up the rapacious, brutal Viking image. For good measure, bring in things like dragons and monsters (Grendel and Fafnir, etc.) from the Elder Eddas and Norse myth.
Minrothad Guilds: I see re-imagining this place like the British East India Company, but with additional interests in slavery, trafficking of illegal substances, etc. Basically, they would be a combine of pirates, smugglers, drug-runners, etc. but with a veneer of civilisation. The rulers would be sophisticated and cultured aristos, who rule over a conglomerate of degenerates. Nothing would be considered beneath them so long as it earned them a profit, and they would have a lot more colonial interests than the current MGs do.
I would probably downplay the elves in MG, as I don't know that they fit well with the change, although I'm trying to think of a good twist. As for the Alphatians, anywhere they are involved (such as Glantri) I'd probably play up the idea that they are aliens to Mystara in every real sense- different outlook, perhaps mysterious powers and different religions (sort of a lesser version of the Elder Gods of Cthulhu lore, who are aliens as much as magical beings).
Now that I think of that angle, the elves might fit better. In fact, I am getting a sort of Melnibonean vision of Minrothad now, which would contrast well with the more decadently human Darokin.
Ierendi: Along the lines of the above, I might go with a sort of Freeport version of the Ierendi Isles, with Serpent Men the real behind the scenes movers and shakers (and founders) of this nation.
Darokin: Going along with John's idea of the haves and have nots- really make that divide a much more prominent one than in the current Republic (where they make a big deal about how anyone can become wealthy). Basically make it like the American Nightmare, instead of the American Dream. I'd play up the colonial America allusions a lot more too, which would tie in with Minrothad and Atruaghin better.
Atruaghin Clans: Make them more like the stereotypical barbaric raiding Native Americans of old western movies and bad history. I'd give them a much larger portion of the southwestern Known World to play in, and have them be very feared in the frontier.
Sind: To tie this in with Minrothad, I'd have the Guilds play a prominent role here, and model this more on British Colonial India. Lots of wars going on in the region, as the Guilds attempt to wrest more control of the region. For additional conflict, I'd probably have either Darokin or (possibly) Thyatis as the major oppositional power in the region (somewhat akin to the French occupational forces in India). Of course, there would be the ever-present threat of the Atruaghin clansmen to contend with as well.
Rockhome: Make the dwarves more like the Modrigswerg as a culture. Very isolationist and with a deadly reputation for creating powerful and deadly magical items and technology. Depending on how much reworking of evil Mystara's history you do, this could then be the new basis of their dislike of the Glantrians- competition. Rockhome would be a foreboding place where everyone fears to go.