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I would think that the reception of Waterworld would make an extended version easier rather than harder. Unless they want to do a full-blown special edition with the crew, who would be reticent to participate, that is. However, if Costner and crew have washed their hands of it, then they wouldn't stand in the way.
Also, precedent proves that both Costner and Reynolds have no qualms against longer version of their movies, so that would be a plus.
Far and Away on the other hand lies solely in Howard's hand who may prefer the theatrical cut for all I know. I've never heard his feelings regarding that film, and just assumed he was happy with it and its reception.
"If you write a story about a soldier going AWOL and kidnapping a pregnant woman and finally shooting her in the head, it's called searingly realistic, even though it's never happened in the history of mankind. Whereas if you write about two people falling in love, which happens about a million times a day all over the world, for some reason or another, you're accused of writing something unrealistic and sentimental."
-Richard Curtis, Screenwriter and Director
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