I just wanted to see how well one can actually mod without using the CS or MWEdit... Try the result: http://www.mediafire.com/?zthyfguhqzj. I haven't tested it, but it should work. With this file, you'll be addressed as %PCClass rather than %PCRace. It only addresses Morrowind's dialogue, Tribunal and Bloodmoon are not covered.
[...]The problem with changing the dialog variables is tracking them all down to change them.
Not really. Just make a copy of morrowind.esm, export its dialogue, exchange %PCRace for %PCClass (only 114 instances in morrowind.esm), run it through TESTool, clean out Cells, Land Textures, and GMSTs with TESAME, and then clean the rest of it with the Enchanted Editor, Wrye Mash, and a text editor. Takes about 90 minutes.
Edit: punctuation