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The last I read in the Developer's Diary back in April or May it stated the second chapter was to deal with the Kraken. It also said they were having trouble with the rendering of said beastie. Now if this is still the case, I don't know. Big D may have decided to go in a dfferent direction and I missed it. Not trying to perpetuate the myth just passing on what I've seen on the web site.
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