Ok, now after returning to the game after 1 year of absence, I log to all my characters. (I was logging to my main to maintain guild ownership). To my annoyance I discover that on my first char, a barb, with one of the items he is wearing, has a higher level requirement, level 15 instead of 14 thanks to the re-balance. So I had received the over level item encumbrance penalty. So I removed the item, assuming that DDO's wonderful and reliable and "works everytime" binary magic would remove it.
Well guess what? It didn't. So, I assumed it was something else however nothing on my equipped items panel was glowing red or even yellow (I know yellow is for not proficient, just to show you the bug). So I stripped down to naked. And I still have the penalty. I saw another player with the same penalty and he was also like ***. So we both filed bug reports, but if I recall, the bug report system is also bugged.
So now, I am a human barb running around Stormreach in a bikini like slo-mo fashion, except you don't want to watch this jogger as he goes past.