Depressing news indeed. But let's be positive: Warners has apparently been restoring the film, and when (or Beatrice willing if) it comes out, it should be a visual feast. As far as I know, the original negatives still survive, unlike with Kane. And if the recent restored version of Kane looks pretty good coming from a print, Ambersons, coming from the negative should look absolutely fantastic. Deep blacks, pure whites, a wide range of greys, sharp image, little grain and scratches... All of which has been lacking in previous, rather muddy versions. I only hope they'll stick to the original mono sound instead of making a ridiculous 5.1 mix.
Let's hope for the best.