I think if Mario Kart was Retro's project, they wouldn't have announced that it would be playable at E3. They know people are foaming at the mouth thinking about what Retro is working on and to just say "Oh hey, by the way, Mario Kart will be at E3" if that was their secret project, would be dumb. Nintendo definitely knows how to make big announcements (Miyamoto's Zelda announcement comes to mind) so I doubt it is their main project.
http://www.youtube.com/watch?v=VE2Dc1sx71U
It is definitely within the realm of possibility that SOME people might be working in conjunction with the main Kart team on courses and such though.







