Holy cats, it was going to be A MUSICAL. Says CHUD:
"It was a musical," [Adam McKay] told me in a one on one interview. "We were going to do four months on Broadway and then jump right into filming."
... And we'll never see it. McKay explained that Paramount does computer modeling of potential profits on films (especially foreign) and didn't see how the necessary 60 million dollar budget would work out. McKay tried to show them the Austin Powers model, but the studio stood firm.
The Austin Powers model has already been invoked without success? Then there truly is no hope of this ever happening. Rest in peace, Anchorman 2: The Musical.