Yeah, I have found some pretty good sources that say a deal is still in the process of being negotiated. I somehow don't think something like this would be canceled due to logistical issues. I could however see it being postponed. Though I can say, from first hand research, that the MTA does have a long approval process for any type of building projects within the station. That doesn't mean it is not possible, or that such projects violate the laws of physics, or building regulations.
On a side note, my source was better than the New York Observer, and confirmed that negotiations were in the process of taking place, but that nothing has yet to be confirmed. Take this article, as well as my comment as a rumor, since that is precisely what they are. Odds' still remain that the deal is in the process of being negotiated. Until an official statement is made, don't believe anything. There is a reason this website is called MacRumors, and not MacPressRelease.