I found another interview

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By the time the first reel was being finished, the crew was fairly excited about the direction the show was heading. The story I heard, was that the screenings were going extremely well and at one point there was talk that Disney would actually increase the budget since they felt they wanted to up the production quality to match the quality of the story. Sadly, in their next breath, Disney pulled the plug on the project. It was a reactionary move (in my opinion) to sales figures for current projects and the overall market. The executives didn’t feel that the original film had a wide enough market to draw upon to support the sequel. We’ll never know for sure, but I really feel the film was progressing well and would have succeeded.