As I said, you shouldn't have to run up and cast it. I've almost casted it across the entire map without moving from tanking the boss lol. I can see what you mean though about diminishing returns, and its kinda "meh" in terms of the results.
I'd have to do a timer on next time I use living dead, but it sure feels longer than hallowed ground. Now the instances I've used it have been when I see my hp reach a certain dangerous threshold and prepare for big hits. Typically if I'm under 2k hp, I hit it regardless. The situations I've used it in is when the healer is dancing through mechanics, and is unable to get off decent enough heals, and I take a big hit.
Two dungeons I've used it in was Fractal and Neverreap on the final bosses. Mind you when people know the fights, this probably never happens. I'm all for buffing these abilities, I'm in no way stating they shouldn't be improved. Just my experience is different than yours in that I've had living dead save me from dying. Sole survivor is nice only when adds are present, otherwise yea completely useless.
If either was changed, such as what you suggested I'm all for it.