I want to start by congratulating you on the release of Beta 3. Developing a mod from early sketches to (close to) final product is not an easy undertaking, and you deserve great praise for what you've done!
Recently, the TF2 community I belong to decided to host a GE:S server after I posted about the mod on our forums. However, reception to the mod was very mixed. While we all appreciated the nostalgic feel of the mod, many of us quickly became fed up with the game's poor hit registration.
While simple lag is an unfortunate staple of online gaming, what we experienced went beyond what this could account for. In general, it feels like the hitboxes for the players are simply too small. The feeling that weapons aren't having enough effect is further aggravated by the false blood splatters that others on your forums have already reported. In addition, the unusual clipping that goes on when two players touch each other makes meleeing extremely difficult, which is highly unpleasant when you are forced to spawn with only slappers or a knife. Having played on a variety of servers with low pings, it is certainly not lag that is causing this inconsistent feel.
The other major complaint many had was that some weapons are very unbalanced. The majority felt that the AR-33 and especially the Phantom felt too powerful, while the Klobb and melee weapons feel almost useless. Our feeling was that while it is important to retain the feel of the source material, it is okay to change things that don't work so well. My suggestion, to satisfy both camps in this debate, is to have two sets of weapon damage values, one based exactly on the original and one new, and let server owners choose which to use.
Some had a few other minor complaints. One was that some of the more fun weapons (rocket launcher, etc.) and dual weapons were missing, but this is understandable since the game is in beta. Another was that some maps do not play well with many players, but this is simply due to the expanded nature of the now-online game. A complaint of my own was that the onscreen text, which once exactly resembled the original's text, was replaced by a generic font. It's not the most important thing, but it takes away from the feel of the game.
While some were disappointed by the other night's offering, many of us feel that this mod has great potential. As many of us know from the TF2 map creation that goes on in our community, feedback is absolutely essential to creating a great product. That's why I'm sharing the issues we felt were problems with you, in the hope that an even better product will emerge.
I wish you the best of luck in developing this very promising mod!