If you ever played Quarterstaff: The Tombs of Setmoth [1] it used this mechanic. I found it to be basically OK although occasionally it could be confusing to figure out which thing(s) you needed to drop to pick something else up.
[1] http://en.wikipedia.org/wiki/Quarter...omb_of_Setmoth
[1] http://en.wikipedia.org/wiki/Quarter...omb_of_Setmoth
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