As several people have noted, one cause of overcrowding is a higher level
character soloing in a spot designed for a group of lower level characters.
One level 50 camping Item X takes a potential spawn area from a group of
level 20's.

Potential solution: Magical items don't drop if the character doesn't get
any experience.

+ reduces farming
+ reduces twinking
+ frees up spawns for appropriate level groups
- forces you to get an item before you gain a certain level
- forces you to trade for an item you can't get yourself

Any comments?