Status of the Kyra engine
The current Kyrandia engine in the ScummVM CVS can play the intro sequences and also shows up some rooms for testing reasons. Most of it was REd and some old things from the first import of FreeKyra are still there. (thanks for the sprite/room code to vinterstum)
Currently LordHoto works on some functions needed to get the scripts running, so that there will be very basic playing support in the (maybe near) future.
If you have any questions about the engine or its status ask cyx or LordHoto.
Help is welcome. If you want to help look at our IRC channel for cyx or LordHoto and ask them that could be done.
Status of the Source Release
Negotiations for the release of the source to Kyrandia (and possible freeware release) have been conducted with Electronic Arts LA. Unfortunately, due to various other issues at that studio, the project was shelved.
Recently (15 Apr 05) the major stumble with the source code release was determined to be a pre-existing contract with another party governing such issues. EALA is not currently in any position to work further on untangling a rather nasty web of sales an d transfers, and cannot chance infringing on the contract.
The current outlook does not look good, given that nobody contacted claims to have the rights, and obtaining a legal outcome to that effect would be impossible for a project like ScummVM. There will be continuing investigation into this issue, however.