If things keep up the way they have been, 2011 will officially be the year in which the "seqboot"--that's sequel/reboot combined into one handy term--became the hot new thing. That term is mine, by the way. Trademark pending!
Over at Game Revolution, a reader by the name of "daverabbit" (probably not his Christian name) has submitted information regarding a paid survey he took which asked about possible subtitles for a new game in the series. Those four subtitles included: Obsidian Blood, Obsidian Sun, Dead Sun, and Revenant. He was also quizzed as to whether those titles would work best alone, or paired with one of the series' previous primary Legacy of Kain/Blood Omen/Soul Reaver titles.
While a paid survey is hardly definitive proof of a game's existence, my experience has been that publishers don't often contract out these kinds of marketing things unless they already have a project of some fashion in the works. Considering E3 is very much on the horizon, we've heard nothing from the Legacy of Kain series since 2004's Legacy of Kain: Defiance, and the general attitude around the industry lately of, "OH GOD LET'S JUST REBOOT WHATEVER WE HAVE THE RIGHTS TO BECAUSE MONEY," a return of this series really does make a bunch of sense. I imagine we'll hear more in the very near future, if we hear anything at all.