I've played with this mod for a couple of hours and I have some suggestions.
Damage bleed through blocking is still too significant. You can spam attacks at someone who is blocking to kill them. Perhaps you can make it so that blocking will simply block all damage.
Alternatively, normal attacks could cost even more stamina. Normally, you can still use your normal attacks without stamina. If you change it so that you can't attack when you run out of stamina, the attack spamming can be eliminated. The Stamina regeneration rate will probably need to be increased if you implement this, otherwise fights might drag on for longer than necessary.
Timed blocking could be split into two parts. One for weapons that can normally block, the other for weapons covered by your dual wield parry mod. For weapons that can normally block, a timed block would damage the attacker's stamina. If this is done in conjunction with the idea above, enough timed...
I don't think blocking should completely remove all damage taken, because to me it only makes sense if someone stands there requiring all his time to just block attacks and he receives a large barrage of attacks, he should eventually be overwhelmed.
Normal attack stamina cost can still be tweaked though yeah.
I pretty much like the way timed blocking is right now, the only thing I'm still trying to do there is to allow enemies to also perform timed blocks.
Borgut, have you thought about working with a Magic balancing mod such as Balanced Magic so that you can integrate magical balancing and combat improvements better with your current physical combat work?
I'm still not sure on this one.. I do think some other people have already done a good job at balancing magic overall, I'm just having kind of a hard time getting a full playthrough on a mage to see if I'm happy with the balance because I simply like playing melee and archer characters so much more

I do think though that I might eventually make a small magic mod which doesn't really rebalance everything (there are other mods that do that well imo already) but maybe just add a couple spells to deal with the new Deadly Combat mechanics. An example would be a kind of shield which prevents stagger reactions for a duration so you have enough time to cast one of those long-cast-time Master spells. (by the way, all Ward spells already prevent staggers so that already works

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I've been trying out this mod, switching off and on between this and Duke Patrick's. It's a great mod, and it definitely makes combat better, but I have some comments, and bug issues.
First, I have to play with the damage reduction esp. Even on master, the increased damage makes fights too easy. I know everybody has different preferences, but I thought it was worth mentioning.
Even with the no stagger spam options, I seem to get staggered too frequently, especially by spells, and maybe arrows. I've gotten in fights with archers, and seem to be at a disadvantage in terms of how often I get staggered vs them--and my current character has the stagger perk.
I'm pretty sure the following bug is from either this mod or killmoves plus (just saying for clarification, I think it's from deadly combat):
I've been in two fights now over the last couple of days where melee combat went haywire. The first time, I was attempting to kill a kneeling draugr, was as close as possible with no barriers in-between, and was unable to hit the draugr with the Sacrificial Blade (dagger). It was fine when I switched to a sword. I just had the exact same thing happen while fighting an ancient vampire (bad timing). I couldn't reach the vampire, despite being as close as possible. This time I couldn't hit the vampire with the sword either. I also had an animation glitch that was preventing me from completing my swings. Not sure if this is a hint that it was a bug in the stagger script, or it may be entirely unrelated to the reach problem.
Anyway, it's a great mod, and I can't wait to see where this goes. Also, FWIW, I'll second the support for some integration with Balanced Magic.

About damage, that does kind of surprise me because I refuse to play at any difficulty higher than adept just because of the annoying health multiplier all enemies get (not that I think it's too hard, just that it's boring to have to beat someone up for that long).
About getting staggered, yes it might be hard when fighting multiple opponents and when some of them are archers or mages... but that's the kind of difficulty I want, as opposed to turning the difficulty to Master. When fighting many opponents, you SHOULD make smart use of terrain, think of your positioning, use cover and make smart use of chokepoints, that kind of thing. It only makes sense imo.
About the bug where you couldn't hit enemies... you should try disabling killmove plus and see if that fixes it, because I don't think that can be caused by my mod really.