Never one to stoke the fires of the rumour-mill, I nevertheless feel compelled to report comments made recently by Powers on the Yahoo Groups  Tim Powers Forum . Whilst contributing to a thread about The Stress of Her Regard, Powers offered the following in comments in response to a post by another forum member:-
"... I'll be very curious to hear what you think of it -- I've got to re-read it myself, taking notes, since it'll be a bit relevant to the book I'm working on. Don't tell anybody, but this new one looks like being a sort of remote sequel to Stress of Her Regard -- same universe, anyway. Of course it may turn out not to be!"
Either way, it's a tantalising prospect for Powers fans!