Short story:
-in near future, a "transform machine" is invented, which works off quantum computers and particle accelerators to transform any matter into other matter
-living creatures get killed if they are transformed, even if they are reconstructed the exact way they were before
-everything becomes possible, you just need the right matrix, some crap to transform and access to a "dome" (the city-large transform machines (make for cool intro, remember Midgar in FF7?))
-soon, the humanity is in decadence
-the rich become bored and get sadistic, the poor become 2nd class humans, and some mighty nations can resist the fall into total reliance on the domes and become independent (Japan, Mexico). These are threats to the concern-conglomerate-controlled world, but they also have mighty weapons, so they get not attacked too much.
-the misery goes worse, when the vatican (STRANGENESS ALERT), which also owns a dome, put out their secretly invented planet-threatening weapons on the face of the earth and said, "Hands up!"
-vatican conquers the world (mostly) and goes for the stars
-the humans become crusaders and conquer one alien planet after the other, as their technology is superior
-their tactic: a small elite explorer team sneaks on the planet, installs three T-Pods, and in between the heavy war machinery of the Empire (DUMB NAME) appears. The explorers get away as the planet is taken over
-the first mission starts with the player as an agent of the empire, as (s)he and his(her) 2 wingmen try to do their usual job
-but his friends get killed after installing their pods, and after during escape the player touches the Transform Beam (short T-Beam), gets some strange vision, and the player loses his conscience in the empire
-he gets degraded after the mission is complete, and has again to work to get his new ship and stuff
-and worse, some over-mighty space creatures appear which can't be wounded by normal weaponry, only by the special T-weapons
-shortly thereafter, he begins to question his past, for he does know nothing about his parents
-eventually, he gets to know that his parents were deep-space exporers for the empire which refused to give away their treasures they got during their voyage
-they said, the human race is on the wrong way, and has made the universe angry
-the empire just beams their ship down to earth, killing them in the process
-but when they examine the ship, the player, as a newborn child, is still alive!
-they take him with them and make him a crusader
-he is one of the few people which can not only survive the T-Force, but use it!
-the rest of the story - I don't know. Should we make the over-mighty creatures something like Lovecraft's Elder Ones? I really don't know (my previous idea was: conquer the empire - ally against the over-mighty - finally kill them with all T-Power you got - but thats stupid)

Any suggestions/improvements/completely other storylines?

Basic game flow:
-company intro
-new game
-first mission (must be the BEST!)
-panel art to bring the story on (like Max Payne)
-other missions + story through panel art
-end sequence

The "feeling" of the game:
-fast, arcade (you know, flashing fx while the level starts - "3 - 2 - 1 - flash! and go!"
-impressive effects (since its 2D, we can efford some software-effects like RT-textures or texture-transforms)
-but somehow mystical (by story, art & music)
-should require some reaction and dexterity (key-combos in reaction to some signals could be an example)