Well then thats too bad because AFAIK this engine has MANY limitations, modified or not. For example, you can only render a very limited amount of lights at a time so when you have multiple lights only a few of the closest ones are rendered. There are many other limitations but I'm not going to make a list.
It's time to move on, Badspot, though I understand that you may have lots of work to do, you should at least start working on making your own engine from scratch or porting it to some other engine (there are many, Torque 3D, Frostbite, CryEngine, Unreal, etc.) but this engine is old so at least make it a side-project or hire someone.
By the way, isn't torque 3D also a bit old?