There's a rumor that Heavenly Sword 2 has been cancelled by Sony, as it is seemed no longer commercially viable. This seems like an unlikely reason considering the first game did pretty well with nearly a million sold and it got decent reviews.
It seems like if they fix the gameplay length issue and put out a game comparable in scope to everything else on the PS3, they could make a pretty good game and maybe start up their own little franchise.
But, there must be something else going on. Again, this is just a rumor, so we may be saying in a week that it's back on and we'll get more smokin' hot thrashing soon.
Glitch!
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