There's been a lot of rumors lately that this game is being worked on. Today I saw this on Evil Avatar: http://www.evilavatar.com
A source is claiming that Blizzard North nearly completed D3 quite a while ago but it was decided that it wasn't good enough to meet Blizzard's standards. Supposedly this lead to the shut down of Blizzard North (which happened last year) and the relocation of much of the team to SoCal to be closer to Blizzard's HQ while the game gets reworked.
Now, this would be completely unbelievable if it weren't Blizzard and we didn't know about the Warcraft Adventures saga. Even then, the timeline seems off. It seems to me that a D3 completed a few years ago would be so technically archaic now that a "rework" would have to be replaced by a "start-over". I can't imagine this except Blizzard probably has a free hand right now because of WOW and the money it's bringing in so I can see Vivendi letting them do what they want with it. But how does a game get that far along without anyone knowing?