I've followed this story VERY closely for the last year and a half, since Del Toro is one of my favorite directors. The best information I can get is that the studio wasn't interested when he pitched it, but that he still wants to do it. The script is complete, and Latino Review said in a script review that it would be his masterpiece (quite an achievement, considering his body of work). Unfortunately, he seems to have given up on it for the time being, focusing instead on The Hobbit and the half-dozen other potential projects he wants to do after that.
But, since The Hobbit will undoubtedly be a huge box-office success, it may give him some swing to do a big-budget, proper Mountains of Madness down the road. If it's going to be made, he's the only director I want making it.