Here's the latest on that:
Updated info available on Wikipedia...
Rumors of the original 3 strip Cinerama negatives being extensively water damaged are enormously exaggerated. It's recently been reported that the actual damage is minimal - just the far edge of one panel and only in some scenes. Further, WB pointed out that they still have the B&W Technicolor separations for the entire film, so they could replace the entire negative if they needed to, but they don't.
That's the good news. Bad news is the math: mastering this film from 3 strip is very expensive, replacing the few damaged negative parts still involves 3 color sep reels for that one Cinerama panel. Further, this film is less known and popular than How The West Was Won and we are still in a recession. Therefore due to cost a first rate video transfer of the film does not seem likely for now.
In order to be released on Warner's MOD Archive DVD program, they would need to be able to transfer the film to video fairly cheaply...
Since the laserdisc was apparently mastered (like 20 years ago) from a 35mm composite print of the general release version, it was missing the short prologue, plus Overture, Intermission and Exit Music. The audio for all these parts has been readily available, and was just included on a 2 CD soundtrack album.
At some point Turner Classic Movies began broadcasting what some believed to be a "restored" version, as it has the Overture, Entr'Acte and Exit Music played over a still shot, and the 79 second battle prologue is now visible. This in no way constitutes a restoration. A comparison of the TCM broadcast with the laserdisc and the actual picture has been posted here: http://cinerama.topcities.com/wwotbgld.htm
It has been recently reported that there is also a 65mm composite negative that could conceivably be transferred to video at much lower cost than the 3 strip negatives.
A petition to release WONDERFUL WORLD OF THE BROTHERS GRIMM on DVD/BluRay has been posted online at: http://www.change.org/petitions/warner-brothers-home-video-please-release-the-wonderful-world-of-the-brothers-grimm-on-dvd-and-blu-ray
Even better, you could send your request writing (on paper) to:
Warner Home Video - 4000 Warner Blvd - Burbank, CA 91522
(every physical letter counts more than a hundred electric ones)
Finally, an archival IB Technicolor print of the original 3 strip Cinerama roadshow version is reportedly planned to show this Spring at Bradford, and this Fall in Hollywood, thanks to a collector in Australia named John Mitchell.
Thanks for that info CineSight. Very informative. I should have realized that the costs would be enormous in terms of restoration.
Since this year marks the 50th anniversary of this film, I'm glad they are planning roadshows, and may catch the one playing in Hollywood.