This is a great way to refactor abstractions that have developed leaks under the pressure of delivery. I'm actually in the process of doing something similar with a server-side implementation that has gotten too intimate with the client code. Building a completely new client for a different problem domain shakes out the dependencies quickly.

What we're founding out now though is that cleaning up the engine while building a new little game was the easy part.

Making the main game work properly again with the refactored engine is taking way longer than we thought it would...

Shouldn't you pay back the debt AFTER you released?