Finally! I got this thing to work! *Patting my own back*
First of all, I couldn't achieve it through blender but I did achieve it with Maya. I know Maya is expensive but MayaLT will do the job too(35$ a month, quite reasonable).
What I was trying to achieve:
Modify poly count for characters created in CC in an external program(preferably blender but that wasn't possible due to 3dx bug). Then import this modified FBX into 3dx and convert it into a character.
How this is helpful:
1. Making game character with different LODs(level of detail).
2. Make mobile ready characters by reducing vertex counts through decimation or other techniques.
3. Modify face morphs to make more realistic face expression.(Higher vertex counts in the face will help model the minute details like wrinkles etc.)
These things won't be useful if they can't be used inside iclone to drive facial and body animation.
Steps:
1. Export from 3dxchange in FBX format with the preset "Maya_win32-bit_Optimized". Basically, delete source morph shapes should be enabled. I am not sure how much the other options affect the next steps.
2. Import FBX into Maya with the options camera and lights unchecked and Animation checked.
3. Go to face select mode and select the faces near the eye or wherever you want. Click on add divisions and make sure mode is set to triangles(not quads).
4. Go to edit->delete all by type->non deformer history and click on it.
5. Click export all, select FBX under type and uncheck camera and lights and check animation.
6. Import this into 3dxchange. It will automatically ask if you want to convert it into a character. Click yes and you are done.
In another example you could remove vertices as opposed to adding them in this example. Here is a crappy quick morph modification I did for my new mesh in under 2 minutes. This wouldn't have been possible with the low poly count around the eyes in the default CC model.
I will be posting an in depth facial morph modification with realistic wrinkles in a few days.
SkyRoads clone for Android: https://play.google.com/store/apps/details?id=com.gog.skyroads
Target Number - A math puzzle game: https://play.google.com/store/apps/details?id=com.tomag.targetNumber