Custom programming language: how?
Designing a custom domain-specific programming language is the right approach to a problem. Actually, almost all the problems are better approached with DSLs. Terms you'd probably like to google are: domain specific languages and language-oriented programming.
Some would say that designing and implementing a compiler is a complicated task. It is not true at all. Implementing compilers is a trivial thing. There are hordes of high-quality compilers available, and all you need to do is to define a simple transform from your very own language into another, or into a combination of the other languages. You'd need a parser - it is not a big deal nowdays, with Antlr and tons of homebrew PEG-based parser generators around. You'd need something to define semantics of your language - modern functional programming langauges shines in this area, all you need is something with a support for ADTs and pattern matching. You'd need a target platform. There is a lot of possibilities: JVM and .NET, C, C++, LLVM, Common Lisp, Scheme, Python, and whatever else is made of text strings.
There are ready to use frameworks for building your own languages. Literally, any Common Lisp or Scheme implementation can be used as such a framework. LLVM has all the stuff you'd need too. .NET toolbox is ok - there is a lot of code generation options available. There are specialised frameworks like this one for building languages with complex semantics.
Choose any way you like. It is easy. Much easier than you can imagine.
Writing your own language and tool chain to solve what seems to be a standard problem sounds like the wrong way to go. You'll end up developing yet another language, not writing your MUD.
Many game developers take an approach of using scripting languages to describe their own game world, for example see: http://www.gamasutra.com/view/feature/1570/reflections_on_building_three_.php
Also see: https://stackoverflow.com/questions/356160/which-game-scripting-language-is-better-to-use-lua-or-python for using existing languages (Pythong and LUA) in this case for in-game scripting.
Since you don't know a lot about compilers and creating computer languages: Don't. There are about five people in the world who are good at it.
If you still want to try: Creating a good general purpose language takes at least 3 years. Full time. It's a huge undertaking.
So instead, you should try one of the existing languages which solves almost all of your problems already except maybe the "custom" part. But maybe the language does things better than you ever imagined and you don't need the "custom" part at all.
Here are two options:
Python, a beautiful scripting language. The VM will compile the language into byte code for you, no need to waste time with a compiler. The syntax is very flexible but since there is a good reason for everything in Python, it's not too flexible.
Java. With the new Xtext framework, you can create your own languages in a couple of minutes. That doesn't mean you can create a good language in a few minutes. Just a language.
Python comes with a lot of libraries but if you need anything else, the air gets thin, quickly. On a positive side, you can write a lot of good and solid code in a short time. One line of python is usually equal to 10 lines of Java.
Java doesn't come with a lot of frills but there a literally millions of frameworks out there which do everything you can image ... and a lot of things you can't.
That said: Why limit yourself to one language? With Jython, you can run Python source in the Java VM. So you can write the core (web server, SQL, etc) in Java and the flexible UI parts, the adventures and stuff, in Python.