I heard back from Nancy in an e-mail on Feb. 11th. She was very encouraging about the book itself, but said it was way too long (it is pretty long). She expressed an interest in looking at it again after some cuts. I've been working on that, and we'll see if I can cut it down far enough or not. If nothing else, the cuts I am making are improving the manuscript IMO.
More when something new develops.
April, 2008: Cut about 30,000 words, and she offered to take another look at it.