This is correct, Agon - The Tale of the Four Dragons has not been cancelled, but postponed. This is because it seems unlikely that Private Moon Studios could generate the resources for implementing the traditional Agon concept in its full splendor, as originally planned.

However, some good news:

Experiments are being done to build the game with a new, different approach in the design, but without compromise on what is really important. It would be too early to talk about the details, there is still a lot to be done, as the team has been focusing on new FMV "Miazma or the Devil's Stone" during the past two years.

And another piece of good news :

As a relic of the first, traditional concept of Agon - The Tale of the Four Dragons, Private Moon Studios is planning to make the original, unpublished demo of the game available for download. Although it was not intended to be a final version (some fine-tuning was still planned), this demo will give you an idea about the original concept. It covers a full scene with great puzzles, English voice and subtitles.

I will come back with more info when available.