played card and switching races
 

I believe I read in the rules that you cannot return a card to your hand once played. So I'm a dwarf with a played "hammer of kneecapping" usable by dwarfs only. And I've drawn a thief with "cloak of obscurity" usable by thieves only. Does this mean that I cannot swap out my dwarf for my thief and reclaim the dwarf-only treasure worth 600 gold pieces?

I suppose I could switch the races and simply leave the hammer of knee-capping up their even though it is useless. Is there a limit to the number of cards that can be played?

Re: played card and switching races
 

Dwarf is a Race and Thief is a Class, so you could have both in play anyway.

However, if you want to discard your Dwarf card, you can turn any Dwarf-only Items sideways to indicate that they are being carried but are not currently equipped (thus not giving you any bonus or abilities on that card). That's actually true for ANY Item card; if you have two Armors but can only wear one, you can turn the other one sideways. You cannot pull it back into your hand; once a card is played to the table, it can't be unplayed like that.

The only limit in the rules about Item cards in play is the one-Big Item limit. In general, Doors can't be played sideways like Treasures (and specifically Items) can, so you can't "reserve" an Elf to replace your Dwarf, as an example.