From all current indications, this set has not been canceled. In fact, there was a post here toward the end of last year where somebody inquired to Lionel about this set, and Mike R from Lionel indicated the set would ship in January unless Lionel's inventory process pushed into an early February delivery... which appears to be what happened, given the original post from Nassau Hobbies.
Quite likely if you ordered it from Nicholas Smith Trains, they will get whatever number of sets they originally ordered. Just that it's been so long ago, lots of folks gave up hope this set would ever see the light of day and erroneously concluded the set was cancelled. But the 611J's have reportedly been sitting in Lionel's NC warehouse for 18 months or so awaiting arrival of the aluminum passenger cars.
Interesting saga for sure... but it appears there's finally a light at the end of the tunnel... and it will be a 611J pulling a string of N&W passenger cars! 
David
