That game was using Kojima's engine, without the engine it wouldn't look like that.

and since Kojima said F you to Konami and didn't let them use the engine you know where that lead to (UR4 ingame confirmed)

Lies. ALL LIES. *cries river of tears that floods humanity*

still sounds cancelled at this point. That was a month ago it was ''in development'' and now the two main people involved in it say its dead

Kojima's game is dead, yes. But I'm not so sure Konami wouldn't just make their own Silent Hill title after they saw the reception to PT. I don't know if they will abandon the premise all together. That being said, if it did happen, it would be far from what we have been shown. No FOX Engine, no similar aspects at all.