I've said it before and I'll say it again. Only three things could possibly stop me from seeing this project to the end: death, prison, or a "cease-and-desist" letter from Capcom. I assure you, the game is every bit as alive as I am.
I apologize for not saying this sooner, but, for the past half a year (give or take), my friend and I have been hard at work planning, designing, and coding our very own engine (since modding Half-Life 2 didn't give me enough freedom), and it looks like it might be nearing completion at long last! Let me tell you, it wasn't easy. The two girls I got to code the engine for me, while a joy to work with, wouldn't stop bickering about every little detail of the engine. You can see a behind-the-scenes video clip of that right here.
While it's still in production and doesn't have a name yet, I can say for sure that the new engine will use Game Blender 3D technology (as seen in the indie game Yo Frankie!) and Bullet physics (as seen in, believe it or not, the game Grand Theft Auto IV and the film 2012). It will (of course) be completely free, open-source, and, hopefully, a cinch to edit, so you can make your own levels and enemies and whatnot. I take my fan games seriously.
With that said, I appreciate all of you who watch this project as well as the ones who have offered to help. I'm still recruiting 3D modellers and animators, so tell anyone you know who's into that sort of thing. KTHXBAI!