Well, two PC died in the last session. As they say, it happens.
What’s worse (or better, depending on your perspective) is that they died in a random encounter, prescribed by me as part of several “if you go wandering in the woods too much” encounters. Some are level one encounters, others higher. This one was level four, just one or two levels above where the PC’s were, but it turned very, very deadly.
(For those interested, it was one ettercap and two deathjump spiders.)
Seamus the dwarf warlord and Gildred the elf warden both succumbed to the deathjump spider’s poison. They and Ransook the human ranger had all been pulled apart from each other into single combat and failed to work together as a team. In the end Ransook’s player realized that his movement score was one more than the ettercap’s and began flat out running around the battlefield shooting, first the spiders, then the ettercap, but by then it was too late.
The group decided to sell several magic items (including one orb that was of no use to anyone) and have Gildred raised, but Seamus’ player decided that while the group needed a “Leader,” it could use a leader better attuned to healing teammates and being able to rebuke the undead. So now we have Jodun, a dwarf cleric of Pelor (to go with Addama the paladin of Pelor who was absent that day). They went out on a brief run into the Barrows again to see how he worked and were pleased with the synchronicity of having a cleric on the team.
For myself, it had been a long time since I killed a PC. I had actually become one of those guys who occasionally fudged rolls to get them just unconscious, etc. but my time playing Morrow Project had reminded me that the occasional PC death wasn’t a bad thing per se.
So as he was eulogized by Gildred following his being raised from the dead: “Seamus–he had an axe and he had a beer, but neither were as important as his friends.”
Strange Vistas 
I had nearly a TPK running the second encounter of Keep on the Shadowfell.
It was the second encounter of 4e for my players and myself and they hadn’t twigged to using movement and coordination to defeat the kobolds. I also fudged dice rolls in the past. With 4e I don’t feel tempted to because I don’t feel like I made a mistake in encounter design that’s causing the problem. Rather, the players aren’t working well together.
While a group can take on an encounter a couple levels above them I’d say that a group that doesn’t play well and isn’t tactically minded should stick to lower encounters.
Which tells me that some of 4e is about player skill rather than character skill. Having all but on of the party die almost derailed the whole adventure.
I made the decision not to fudge this encounter, mostly because it wasn’t like it was five levels higher than the PC’s (which some of the KotS encounters are), it was one. You’re spot on, by the way, the thing that has always threatened the players most is their own inability to work as a team. When they start doing their role in the party, they do fine. When they start falling back into the “everybody just find a dance partner” strategy, they get hammered.
I’m becoming convinced that this is actually a strength of the ruleset, because it reinforced the notion of group play rather than individual play. You can’t check out during a game, paying attention only when it is your turn and just telling the DM that you’re smacking the closest person with your sword. There is a deliberate intent in the rules here.
I’ll say one final thing. The good part about a sandbox campaign is that there is no “adventure” to be derailed, no real linear plot for the players to wander off from. Sure in my campaign they are supposedly trying to find this huge treasure but that’s pretty thin. And while that means that the players don’t get into deep narrative elements, it also meant that the PC’s got to decide to change direction at the last minute and go wander the graveyard so they could try out the new guy. Furthermore I didn’t feel frustrated that they went in one direction and turned around and went back the same direction in the same session.