Not that I believe rumors from two russion guys that work/worked for a site that I have never heard of talking about japanese development that that has a history of being security tighter than fort knox..... but this wouldn't surprise me either. 

And about that team, I think the problem and ultimately what happened to the game, is that something went really wrong with that team. Ad being japanese, we wouldn't see someone come and write up a long drab about how poorly he/she was treated and how development feel apart on reddit or some other site like we would see here in the west so no one would probbaly ever know what raly happened. Its my guess that cause of the extremely artsy nature of that team, development just couldn't go on if or after they lost a couple of lead directors. Hell at one point I heard the Udea, the studio director left sony for "family reasons"... I think he's back with them now though. 

They should write a book about that studio.... I'll buy it.

What is that game about, anyway? action/adventure? puzzle? rpg?

this. 

although announcing it is canceled at e3 would be quite the megaton.  we would never forget.  we would never forgive. 

More Adventure, like Ico I think.

Sony. if true.

This is how I see it: It's at E3 or TGS, or it's canceled.

It cant be defined, it's beyond human perception

What's so special about the game anyway?
At this point, like Half Life 3, it's most likely doomed to disappoint, and that's if it gets released at all

I wouldn't be surprised really. After so long without any hint or trailer, you just can't help but think that there was something fundamentally wrong with the concept of the game that kept it from being finished.

Lol while hope it's not true, it would be kinda funny