I'm not surprised. This project was a great idea and had a lot of potential, but the lack of a good (or at least decent) leader during its several incarnations couldn't do any good and ultimately killed it. There were some interesting developments near the end of its lifespan, with Chimpo, STHX, and their good ideas, but the project was already too ill to survive; unfortunately this didn't start with the right foot, so that going back on track was hard, too hard perhaps.
However, for ones who are still interested, read the fine print in Scarred Sun's post. She is not saying that P:SR is dead forever, but just that it won't receive any more support from this forum and that it can't be promoted here. This doesn't stop the project from being developed on some other board, presumably with a different name which doesn't involve the words "Sonic Retro". The sonic community is wide, and if enough people are seriously motivated to pull this off, it will happen sooner or later, although chances are very slim at this point.
I, for one, know that I have nothing to contribute, since I suck at graphics, and I can work only with modules for music, otherwise I'd be glad to step in and do my best to help whoever will be in charge should this project come back from the netherworld. About me being a project leader, I've been saying this since the very first thread, I know I would be very well suited for the job since I have good organizing skills, probably this project wouldn't have failed with me at the lead, and I'm not being presumptuous here, with a solid leader from the beginning instead of Phoebius I'm sure this project would have had more chances, but unfortunately most of the community don't like me, so I never nominated myself (and I'm not doing that now), because I knew that not everyone likes to work with an unpopular leader.
Either way, farewell P:SR, I will always remember you as Sonic 4.
Damn, I hate to write serious paragraphs in English :P