This is much more recent info that we got at the AO event a few weeks back.
There's a single dev working pretty much full time on the new engine, nothing is interrupting his work, halloween, s7 etc is all completely unrelated to his work.
His job is to integrate the new AoC engine into AO and make it work. Nothing else.
In contrary to all self proclaimed experts posting before me in this thread claim, the new engine progresses at a steady rate.
It's NOT stalled, it's being worked on every day of the week.