Peter Jackson is signed on to be executive producer and Ron Perlman is set to be Lord Hood so it's definitely not scrapped. Greg Bryk will play Col Martin, he's been in a lot of TV shows recently and you might remember him from Saw 3D in 2010.
I love the acting of Ron Perlman, I have ever since he played a caveman in Quest for Fire back in 81. They showed the movie, minus the naughty bits, in my 3rd grade class. He's set to star in Hellboy 3 this year too.
The problem is with the script. It focuses on Master Chief and a battle vs the Covenant on Halo but gamers are already into the phase after this battle so it's not anything new to them, it revisits the old stuff we all already love. I think the studio wants a blockbuster with residual game income and so they want a more forward looking theme to the movie, to get people to want to buy the game for what's coming up, not what's already been done.
Marketing and sales, and money, stand in the way of this one but it should get done.