What I read is that Puzo wanted to concentrate the next story on two fronts; Sonny seeing his father kill (which is in the novel), thus, deciding his fate and the second story, Vincent as the new don, the story would take place after Mary is killed, with Michael slowly deriorating.
Another possible setting for a story Coppola was said to be considering was the early 70's, which could involve Pacino because Michael wouldn't look as old. Pacino can still pass for a younger Michael than he was in 'Pt.III'.
Personally, I think the early 70's stuff would be more appropriate to the 'Godfather' legacy than anything modern with Vincent. While I did enjoy Andy Garcia's performance in 'III', I don't think they could come up with a suitable story to accomodate a 'Godfather' movie without Michael. Vincent is just too hot headed, which would make a fourth 'Godfather' an action-fest shootout with no main center, which is what Michael is. A 'Godfather' movie without Michael would be like a 'Dirty Harry' movie without Clint Eastwood.
And, I think the novel should be called 'The Godfather - The Continuing Story'.