Military Times and Kit Up! have both done follow up stories. I've been keeping up reading them and the FN press releases posted in full on other blogs, all which quote SOCOM stating they aren't buying more 5.56 versions.
As is typical when someone doesn't hear what they want, the messenger is questioned, not why someone hasn't kept in the loop.
The upshot of the whole SCAR episode is that SOCOM will still buy the MK17 because they need the .308 version. FN responded by saying they would be happy to supply caliber adapter kits so they could also use 5.56. Like an overloaded soldier would want a carbine two pounds heavier than needed.
As for Ball vs Improved, I didn't have it right for years, and believed the newspapers and word of mouth. After a while the truth will come out, reference this history:
http://www.thegunzone.com/556prop.html
Powder wasn't as much a problem as 1) issuing a weapon to untrained troops 2) not issuing cleaning equipment - which includes LUBRICATION. No oil, no maintenance, FAIL.
Add in the rude introduction and fielding of a weapon that completely bypassed the chain of command, and made no effort to educate anyone in it's proper use. Bolt action Generals weren't asked, op rod M1/M14 staff and company commanders weren't even in on it. Soldiers were just given M16s and told to go shoot them by a decision maker in DC who increased Colt's previous careful assembly four fold.
One of Colt's barrel makers got the spec a little off, because the heat was on to field hundreds of thousands right now. Production jumped from a 8 hour a day 5 day a week shift to nearly 24/7, with hundreds of additional new hires with no previous experience making parts and assembling rifles.
Things aren't as clear cut as we sometimes like. Reality is like that, but what comes next is accurately assessing causes. What happened was untrained troops were told to use a weapon they didn't know, and given no way to properly maintain it. Commanders with a difficult new low intensity conflict that had no front lines or even an enemy distinguishable from friend, using draftee troops, were getting their butts kicked in someone else's back yard. Something had to be blamed.
I was learning how to tear down the new M16 in high school ROTC by 1970, it seemed to be different from all the stuff I had grown up watching at the movies. What I learned is that all the stuff in the movies, media, and press is always suspect and usually full of misinformation. In fact, I was taught in the Army that the first report is always suspect, and what the public has been doing for 45 years is believe anything they are told.
Reality is not summed up in 30 second sound bites. There is more to truth than that.