According to a guy at the forums of IGN, who apparently works for Nintendo, Retro was indeed working on a Zelda, but not anymore. He said that there's only 3 people in the USA who saw the real Zelda so far, 2 localization guys and 1 trailer director.
He also said he knows what Retro is working on.
Proud poster of the 10000th reply at the Official Smash Bros Update Thread.
tag - "I wouldn't trust gamespot, even if it was a live comparison."
Bets with Conegamer:
Pandora's Tower will have an opening week of less than 37k in Japan. (Won!)
Pandora's Tower will sell less than 100k lifetime in Japan.
Stakes: 1 week of avatar control for each one.