The Silver Lining's troubles first began in 2005 when King's Quest owner Vivendi made moves to quash the game. Vivendi eventually granted the team a non-commercial fan license and development continued until February when the property's new owner Activision Blizzard decided to rescind that license, demanding the team halt development.
However, in May Activision revealed that "given the overwhelming community support for the Silver Lining project," it was "in discussions with Phoenix Online Studios about allowing them to continue to finish the game and then release it to their fans."
Evidently discussions went well as Phoenix announced today that it "has reached an agreement with Activision to release their project as a free downloadable series."
The first episode, 'What is Decreed Must Be,' will be released for free on July 10, "with several more installments releasing throughout 2010."
Awesome. Love kings quest.