Although there haven't been many news posts lately, there has been a lot of progress with Kilgazar.
First, the game was converted from Java2D to use LWJGL. This lead to cleaning out a lot of cruft in the code, which was very much needed. In addition to those changes, all of the in-game graphics were completed, a method of notifying the player of information (such as not having enough mana to cast a spell, etc) was added back to the game, and the player attributes were balanced.
Basically, the milestones that remain are adding sounds and music, finishing map generation, and finalizing the menus.
Then it's on to testing, testing, testing.
