At an event as part of HHN I got to talk to one of the designers of HHN who also works on other projects around the park. As part of our discussion we talked about the limitations which the park is under because of Seuss landing, and the Harry Potter section. Basically they are not allowed to do a thing in either one. Even if the section to themed to London if its Harry Potter at all I can't see how it can be touched by HHN or any other event without permission.
Something else that was interesting we talked about was Strong Arm which became Forbidden Journey. He said that the studio where that work was done was being used by a new ride technology which he said the first we might hear anything about would be 2013.
I have seen several people talk about the land behind Jaws which I assume they are talking about the cleared land you see on Google maps behind jaws, MIB etc. This was sold to a developer maybe 2+ years ago. It has apartments on it now thelandmarkatuniversal.com/
which might place some limitations on what the replacement could be. If anyone here went to HHN they even made a joke about the apartments during the opening of Bill and Ted.
I am really torn on the whole Harry Potter being a possible replacement. I want to see what else Universal can do with Harry Potter. What they have built so far is pretty amazing. But I was pretty set on it being the replacement for the rest lost continent. It just seems odd to put it in both parks. But I have to wonder if JK Rowling would even let them build Diagon alley next to Hogsmeade. That is the one factor I think a lot of people ignore she has to agree to anything Universal builds.