I've made only one deo-bomb but have yet to use it.  I spend most of my money on repairing my favorite weapons but the best strategy for me is to just take it slow.  I play Dead Island like I play Dark Souls.  Go slow, keep my head on a swivel and explore all the nooks and crannies for any money or other helpful items.  I also purchased the skills that reduce the monetary penalty for dying and I always spend it on repairs or upgrades before I lose it from dying too often.

I've never had the problem with the stairs but like others, I have seen the zombies attack through walls. Wasn't a big deal though because I can attack them as well.  Some problems I've had are on completing two missions that award xp and a weapon, I only got the xp and was never rewarded the weapon.  Another problem I've had, while being attacked by zombies I'll hit O to use the health pack then attack again with R1 but instead of using the weapon I had equipped my character will drink alcohol instead.  The alcohol wasn't even epuipped on my weapon wheel.  I don't even know if you can equip it but that's happened about 6 or 7 times.