It would make sense to add a simplistic height function to dynamic lighting to simulate being able to see some objects (a tall tree or a castle on the hill) above other foreground objects (a low tent or a market stall) that might block some sight lines. My suggestion is that each line in the lighting setting is allowed one of three tiers, with tier one being the lowest and tier three being the highest. Tier one objects would block all other tier one objects and all tier two objects and tier three objects when a character is standing within five feet of the object. When a character moves back to ten feet, tier three objects come into view. If a character steps back further tier two objects become visible. Tier two objects always block tier one objects and sometimes block tier three depending on how close a character is to the object. Tier three objects block all other tiers. This wouldn't solve all sightline issues in a space that has object or buildings of multiple heights, but it could help some, and I think it could lead in an incremental fashion toward a more interesting dynamic lighting/sightline system. Further developments might include a distance ratio as well, such as tier two objects are revealed by a tier one lighting line as long as that object is further than x ft away. (Basically it's the first step do doing sightline trigonometry.)
