I like the idea of some horror elements. Heading in to what seems like just another "clear out the monsters and take their stuff" kind of sidequest, only to discover the whole place is ridiculously dark and there's bizarre things painted in blood on the walls because there's an ancient ritual going on here and what people thought were monsters were cultists bonding parts of dead beasts to themselves and now you suddenly have to stop them from summoning something horrific... yeah, I'd enjoy that. ^_^
The thing is, atmosphere is going to play a huge role in making any horror work in this game. The isometric view makes it so we can see quite a bit, so give us something truly creepy to see. Or, set the entire area in close halls and narrow passages, really play up claustrophobia and the feeling that we can't see as far as usual, so now we get much less warning before something comes to eat us. Just knowing that a fight would be much more difficult because I couldn't use my usual tactics would be enough to put me a bit on edge.
Also: sound. Sound is very, very important for this sort of thing. Quiet, creepy noises in the near distance? What might have been voices from somewhere else in the dungeon? A party member asking others "Did you hear that?" when I, in fact, heard nothing? Or maybe just horrific screaming coming from the other side of a closed door, to make me reconsider if I actually want to open it. Happened to me once, way back when playing Daggerfall, and that was the first time I was letigimately scared while playing a game.
One thing I don't want, though, is unbeatable enemies I have to run from. Horror or no horror, this is heroic fantasy, is it not? I know some things will be too tough to beat at a certain level, but that just means my party should be able to handle them at a higher level.