People really don't like using actions that punish you when you use them. There is absolutely no reason why players should be coming up with suggestions for appropriate punishments for using Living Dead when Holmgang is objectively better in direct comparison with no drawback whatsoever. Rather, players should be asking what sorts of significant added benefits Living Dead should provide over Holmgang to warrant the minute longer recast.

If I was reworking DRK, I would do the following:
1) Make Darkside provide a baseline faster GCD, in the same vein as Huton and Greased Lightning.
2) Make DRK really be about resource management. Every time that you use an action that costs MP, have it generate a small amount of Blood. Every time that you use an action that costs Blood, have it generate a small amount of MP. Have Blood Weapon amplify these exchanges.
3) Turn abilities like Bloodspiller and Carve and Spit into a multi-hit attacks instead of one big Fell Cleave styled hit. Have Delirium amplify the number of times each action hits. Have Living Shadow link into all this. 99-hit combo? Yes please.
4) Build around a shield theme defensively:
Have Souleater give you a small barrier shield and extend your cumulative shield duration.
Have Dark Mind increase your magic defense by a small amount while you have an active shield and extend your cumulative shield duration.
Have TBN apply a shield to both yourself as well as an ally, with the option to not target anyone. If NF gives you that option, so should TBN.
Have Dark Missionary spread your existing shield to all nearby teammates and extend your cumulative shield duration.
Have your invuln convert the lethal damage that you take while at 1 HP to a shield, up to a maximum of say 50% of your health total, and extend your cumulative shield duration.
Have your rate of resource generation increase while you or a teammate has an active shield.