I e-mailed a link to this thread to Peter and Annie Blood-Patterson, and they'll be checking here and in the fantasy folk circle. Their deadline for submission to the list of suggested songs to Sing Out! is this Fall. Sing Out! will take care of the project from there. Projected publication date is 1999.
The new book will be almost identical in format to the first volume, but it will probably have an entirely different name. Peter & Annie found it was a lot easier to get rights to songs than they anticipated, so they are thinking of including a lot more popular music in the new book - although folk music will still be prominent. They don't think this book will be as widely used as the other book, because they can't imagine that groups will want to buy several copies of a second book. This book is not supposed to be a "hymnal" - it's intended as a resource for song leaders and performers. Of course, that was the intention of the first book. They had no idea that they would sell as many copies as they did. I don't imagine they'll complain if this book is just as successful.
So, that's what they said, in a nutshelll.
-Joe Offer-