That's definitely the most frustrating part of the game -- you can easily lose all of your stuff because you failed to kill and loot your old self before dying. Since you typically die in the middle of a bunch of zombies, and restart with six bullets and no medkits or anything else, the chances of you dying again before retrieving your items is pretty high. Sometimes you end up getting it all back and more in short order, but other times you can get caught in a cycle where it just makes more sense to start over. I don't mind horribly, since the game is really engrossing, but it strikes me as a pretty serious design flaw.