I just got an idea. Since you already coded the free-aim (You we're experimenting with and without it). Why not make it a toggeable switch?
Leave it off by default, And make a seperate "Hardcore" mutator that adds free-aim, removes grenade counter, removes the ammo counter and makes ammo less effective.
I think Alan was mistaken, we haven't actually tried it in KF. Adding it in is a lot of work, and adds lots of additional network bandwidth for the player movement replication code.