I have been waiting eagerly for this game.  I saw this today on my daily internet browsing (from 1UP.com):

"Sony Online Entertainment's espionage MMO The Agency appears to have suffered a serious setback. Several of the development staff's senior members have departed to form their own studio, including the former studio head.
Eurogamer is reporting that studio director and executive producer Matt Wilson, art director Corey Dangel, and producer John Smith have formed a new studio called Denonator Games. According to the official website, the studio was formed on July 4.

"This was a very hard decision to make, but it's the right decision for both us and the project. There were a variety of factors into making this decision, but we wish SOE and The Agency the best success," Wilson said.

Detonator Games lists their goal as bringing "the best of social entertainment to the emerging world of mobile and social networks." Wilson and Smith were previously founding members of Fireant, which eventually became the Seattle studio currently working on The Agency.

As for those left behind, sources in the Seattle studio say that The Agency will now be undergoing "an extensive rethink," which will take it well beyond is current projected 2010 release date. SOE, however, denies this. The last time we saw The Agency in action was shortly before E3 2009, and our impressions were generally positive. With the development team having now been split though, it may be quite a while before it finally arrives. "

SAD!

It is old news, but as far as I know, the Agency is still being worked on. The SOE Art Portal on twitter posts often about art assets being worked on for the Agency.

SOE has not been very vocal with their product. Obviously losing those 3 took a huge hit on the game, but I don't think it would completely derail the game. Time will tell... Which is sad because I am absolutely ready for the Agency... I really can't wait.

I hope they can clear some air this year at E3 this June or SOE's Fan Faire regarding The Agency.

Aww crap. I really thought the idea was cool, so far as we knew. I hope they don't drop it. Still, I dunno why a person leaving is such a hassle. The concept is still SOE property, so why not keep working on it?