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I recall a while back there were rumors, well more than just rumors, more like a mentioning by one of the devs that they had considered a mass battle version of warmachine. Basically allowing for say, warhammer scale battles in the warmachine universe. Probably simplifying and streamlining things. Has there been any more word on this, now that the MkII has shown itself?

No MkII didn't increase the size of Warmachine battles, in fact if you were playing 750 point games before (to field Epic Warcasters) then your game will probably be a little smaller as everyone seems to be playing 35 (roughly 600-650 points in MkI) point games.

I've not heard anything from PP about a Warmachine mass battle game.

The original rumor popped up I believe in the D6Generation interview with Matt Wilson. Since then, PP has said nothing about it.

I think you have to pay attention to context of the interview, though. I don't recall exactly, but I thought the mass battle game was in the "Things we'd like to do" category, not the "Things we're working on right now" one. It might be a decade before we hear of it again.

If it does happen, it will be the work of the guy who worked on Monsterpocalypse, as per
the interview with Matt Wilson.