Twilli Legends is not dead, nor will ever die. There has been no news lately, but I assure you, Twilli Legends will live, and be completed.
First of all, the main issue for the game was to find an engine to actually create the game with. One os now in the making, and will be used for this game. I will clue you all in later.
Secondly, I may switch the graphics from pixel art, to vector art, but this all depends on the look and feel of it.
Thirdly, ... wait, I dont think there is a third point... nope. Anyways, There will be progress on this soon. I promise you that.