I don't know how many people are awaiting v0.4, but i want to make something clear:
Even though development seems (and it is) halted, the project is not dead.
lunarrush is working with team Fracture in the meantime. They are prototyping a game with Open Surge Engine, which will see an early alpha released soon. Sorry, i can't detail more, even though i'm somewhat involved in the project, i won't leak. I'm not the person to do the announcements.
I am, on the other hand, learning UDK, head-on and full speed, which consumes all my free time at the moment. But it is for the good. In less than a month I was able to create an early prototype of what SD would be in 3D. I have not yet decided if the movement should be a totally free, or restricted to side-scrolling, or maybe blending both and do separate gameplay types or different levels.
Regarding the Open Surge version, I'd like to remind everyone: It is Open Source. You are free to modify the game however and how much you like. You can even use the scripted sub-engines (the RPG system and its modules) to create a new game. Nobody is going to knock your door with a C&D letter, as long as you don't use and distribute copyrighted content.
Regarding the 3D version, if you haven't seen it:
this is how it looked yesterday
for more, stay tuned to our Twitter and Facebook news. The blog remains, but only important news will be in it. All other development news should be found at our feeds.