Regarding the original question, I don't think any of you should expect a traditional release in the near future--that is, don't expect this to suddenly pick up where everything left off, or to see a sudden announcement from Gygax Games on their web site.
I know Gail is putting in time and effort to do this, but it will have to be measured in a long-term timeframe. If we get to see Castle Zagyg again in print at all, it would have to be funded by a more wider-release that is released to all audiences, such as a computer game or MMORPG. The tabletop market is too small right now to justify that type of release.