Currently developing a different take on this same concept, but using hand-modeled voxel shapes in place of sprites.

Haven't posted any significant updates in a while but progress is steady; just added cell-shading outlines to sprites that require it (can't translate black outlines into voxels otherwise) and improving the render pipeline to accommodate it.

http://n3s.io but more recent screenshots are at https://twitter.com/n3semu