A month ago someone asked him on Formspring when is he going to kickstart The Black Hound. Check out the answer. The Black Hound is actually Baldur's Gate III, announced in 2002 and missing in action since then. A project very dear to Sawyer, who worked on a NWN2 module based on it for a while. Beamdog already said their BG3, if made, won't be based on The Black Hound.
The game can also be Icewind Dale 3. The D&D digital rights have reverted to WotC, so no more Atari monopoly on that front.
J.E. Sawyer was working on Defiance, an RPG set in a dark fantasy world after the bad guys (think Sauron) won. This was an older concept shopped around to various publishers. From what I hear - I don't have a link - this was in development for 7 months for the next Xbox before Microsoft pulled the plug in March. I suppose this is not what's teased because they laid off the Defiance team.
It can, of course, be a LOTR game - the "fellowship" and generic fantasy names and style sure remind me of LOTR. But Warner Interactive has no idea how to handle the franchise: they released some shit games, don't have anything worthwile for The Hobbit's launch and may or may not have cancelled a LOTR game after sinking 10 million dollars and more than 20 months in it.