No, it's not happening, but Nina Kristensen sure wouldn't mind seeing it on either Microsoft or Sony's download services, according to a recent interview with Lesbian Gamers:
Kung Fu Chaos would be awesome as an XBLA or PSN game! I think we're going to be seeing more and more interesting and diverse games coming along in the next few years as online & downloadables become increasingly mainstream.
Kristensen founded Just Add Monsters, the original developer of the title. She's over at Ninja Theory now, which as we know created the PS3's Heavenly Sword.
Speaking of Heavenly Sword, Nina reiterates in the interview that the game is just the first in a trilogy. Here's the quote verbatim, in case you missed it:
We haven't announced anything as yet but I can confirm that when we wrote the original story we did write it as a trilogy...
Yah! Do you think they'll get Andy Serkis in to do the mo-cap again?
The Nina Kristensen Interview With the LG [Lesbian Gamers, thanks Lesbolicious]