So I was reading a bit in some book, All Your Base Are Belong To Us: How Fifty Years of Video Games Conquered Pop Culture by Harold Goldberg, that claims that the "failure" or problems in "KQ8" had more to do with Phantasmagoria than anything!
Apparently, they claim that Davidson and Associates took over Sierra, and the owners were crazy fundamentalist conservative Christians, who thought Phantasmagoria was immoral going to destroy the nation's youth, turn them into murderers or what not... So they apparently had little trust for Williams, thinking they were trying to corrupt the masses, and destroy the Christian Nation™! They didn't like the violence in the game apparently.
They apparently stopped marketing Phantasmagoria (while it was still going strongly). Roberta believed it would have sold alot more if they hadn't meddled into the game.
The Davidsons worried that Roberta was trying to insert her own 'corruptive' influence into Mask of Eternity as well due to what was included in Phantasmagoria. So apparently, as this theory goes, that the Davidsons (Jan and her husband) were designing their own 'clean' version of what they believed KQ8 should be (one can guess a game that cut out most of the violence), and Roberta was designing her own version of what KQ8 was supposed to be. They kept on sending her their 'suggestions, and orders' and what she needed to change to make it suitable for the public consumption to prevent it from influencing the public (some kind of censorship apparently)...
The book states "Roberta" was angry, because she didn't like Davidson telling her how to write her own story!
So it claims that two development teams were working on script and puzzles at the same time. Roberta worked on her version, and another team (at Davidson and Associates) worked on theirs! When it came down to it, she started to feel like no one was listening to her (the Suits weren't and were trying to design a second version of the game on their own outside of Roberta's influence)!
Now one has to ask if this is true, what was going to be in KQ8 that would have been so anti-Christian that fundamentalist Christians would skwak? What direction was the series going? Was it even more violent? Was there alot more Christian and Demonic imagery intended to be put into the game than what made it in the final release?
Would it have been something that would have pushed away King's Quest fans even more? ...or would the mythological and christian motifs have been much deeper, and drawn fans in even more?
..or would the fans have preferred the Davidson version of the game?
There are quotes to post, and more supporting information, but I'll wait until others have time to comment.