Hey, thanks for the reply! I just loaded an older save and this time when I unequipped pet Grog the permadeath mechanic stopped as it should. I'll let you know if I encounter this again, but for now that's all I know.
My characters are dying everytime they are knocked out in a fight. That started happening when I picked up pet Grog, but I don't have him equipped anymore.
I will be sending the saved game and system specs to the e-mail.