It's been a tough choice. My affection for the Source engine is one that I wish to keep, however, after alot of long thought, questionable forum posts, and biting the bullet, we are now developing for the CryEngine2.
I originally wanted to keep both engines to keep everyone happy. More people have the Source engine, it ran better on everones system, and there is plenty of support for it. However, the main crunch was the cut scenes. After reading our Storyline, I had no idea of how to make the cut scenes in the Source engine, yet they seemed easy in the CE2 engine.
It allows more detail - you have seen the level of detail for our characters, and I think that it would be much easier to put these into the CE2 over source. While support is still growing for it, there is alot of documentation to do with the SDK, aswell as the Map Maker sandbox being much easier to use and pick up.
I'm not ruling out the Source engine. However, it seems that for now, CE2 fits our needs better. We may run some single player maps in the Source engine, however I don't think they will have the same effects as what they would in the CE2.
I'd like to hear all of your comments on this!