We are currently investigating reimplementing the 'Tinsel' engine, as used by Discworld 1 and 2.
Ender is organising this.
Status
The rights situation has been resolved, and Terry Pratchett and his agent Colin Smythe have approved the source release and future freeware re-issuing of the game.
We are currently awaiting news on the engine source code.
Update
As of this update (28th July 2005) we are still awaiting the source code, and after a long delay it should be forthcoming shortly.
Summary
In short, we have all the approval needed to move forward with supporting the game and making Discworld freeware. However Discworld is NOT freeware at the moment. It may be in the future, assuming all goes according to plan.
We may not be able to wing a DFSG/OSI compatible license on this one, although I'll surely try.