Someone here stated the *mystery project* may well have something to do with Epic Games' and Scion Studios' cooperation. According to this (or this) interview, we'll know this coming E3.

First thing you'll notice from the interview is that the title planned by Scion is definately a console-title. The next thing you'll notice is that the title will most definately by Unreal-engine based. However nowhere is mentioned that the game will be Unreal-game based. In fact, and I quote: "Based on what we got to see of Scion's debut title and what we have heard of the game's preliminary design plans, we can say we are very much intrigued and encouraged at what Scion is working on and it will take console titles in a couple of directions that really haven't been done before."

So this may or may not by Jazz 3. But it sure is nice to know Epic's state of mind ain't "Unreal-only".