Originally Posted by Wonko the sane
Edit: daggerfall wasn't one tile at time?

No, Daggerfall is full 3D with free character movement (creatures and NPC are sprites though, not yet 3D objects).

I looked around a bit more yesterday, but I couldn't find a lead. Your story about giant bugs reminded me of Entomorph: Plague of the darkfall which I played long ago, but that was all 2D isometric, and there was no real world beginning like you describe. The earlier Thunderscape from the same series (which I haven't played) featured a 3D first person viewpoint, but I don't think it fits either.

Seems it really was a very obscure title - let us know if you find out.