Heh, I forgot all about that one. I would of been skeptical about its quality, judging by GRIN's track record (it's not that good). IIRC that was going to be more along the lines of a hack n' slash game.
If a western dev was doing their take on a FF game, I'd like a CRPG to come of it. I'm kind of hoping this rumor is true, I find it a very interesting thought.