I think it was largely a problem of exposure, not that there's necessarily anything horribly wrong with your concept. Some KS games enjoyed ridiculous amount of success because they were given shoutouts by lots of big / previously successful KS game projects. Darkest Dungeon comes to mind; they made a really great teaser trailer which got them lots of exposure. Also the Cthulhu aspect probably didn't hurt as people seem to gobble up Lovecraftian inspired games lately. Perhaps that's what your game is missing?
Also, this is probably the worst time of year to launch a KS in general (holiday shopping season). People are saving their disposable income for gifts / travel so pledging money on a game that will hopefully come up in a year is something many won't even consider. (I think this may be a big part of the reason Deathfire didn't make it's goal a couple years ago). Wasteland 3 Fig was still a success but that's obviously a huge project that gets lots of press, Brian Fargo is a great (snake oil) salesman, and when you eliminate the investors and look at the actual backers it was actually their least successful crowdfunding project (though that might be partly due to the new platform or higher min. price for a copy as well). I'm sure the US election isn't helping either.
After all, most of the negativity on your Steam Greenlight page seemed to be focused on the "you'll never get funded", not "your game looks like shit". Take heart in that.
Anyway, seems you will need to lower your budget / scope, so I think ditching the combat is definitely the way to go. The combat was the least appealing aspect to me personally, as I generally dislike real-time combat. As long the choice & consequence aspect can be retained I think you will have something special. As far as I can tell, non-linear adventure games are still pretty rare. My interest in your game would actually increase if I didn't have to suffer though ARPG hack n' slash portions.
I'd hate to say get rid of the land of the living altogether as I'm assuming from the title the idea was that your character will find a way to return... perhaps as a revenant on a quest for redemption / revenge. Seems like a good angle. I mean, a game where you're stuck in hell for the entirety seems to be lacking a goal... But yes the initial living world part could probably reduced or even removed entirely. Since you're obviously going to die that part may as well be a cut scene / tutorial segment. Also if the PC returns to Earth as some sort of undead creature, then perhaps he can only go out at night so that gives you a valid excuse for the city streets to be less populated.
Early Access is of course another option to raise funds. Many gamers seem to react negatively to the idea of an episodic release though (myself included tbh). But the only downside to EA is that some people (and the press in particular) often treat your Early Access release as if it were the game's launch... So you'll need to have it fairly polished and with enough content to justify the price as the initial impressions will stick with you.
I think you should try Kickstarter again next year with a reduced scope / goal. It is commendable that you asked for what you need and not what you thought you could easily get so I'm not suggesting you deviate from that, but I'm hoping that getting rid of the combat would be a huge reduction in costs and actually make your game better / more appealing to the adventure game crowd.