Ego Draconis was pushed out the door unfinished because Larian ran out of money (and possibly also time).
They were ? This is new to me.
I read it on the Internet once so it must be true. Sadly, I can't find the source any more (though I suppose I could if I spent far too much time digging), so I won't blame if you take all of this with a grain of salt or just disbelieve me outright.
The story went roughly like this: At some point during the development of Ego Draconis, Larian simply ran out of money and they were forced to push the game out unfinished. While the future of the game (and possibly Larian itself, but I don't know about that) was up in the air, unofficial work was already starting to patch Ego Draconis a lot without knowing it would ever actually happen. Fortunately, Ego Draconis sold surprisingly well, and Larian got the money they needed to fix up the game and give it a proper ending. Unfortunately (or perhaps fortunately from a different point of view), Ego Draconis' problems apparently couldn't be completely fixed by just patching it so we got the Dragon Knight Saga instead, which overhauled a lot of the basics and gave us the expansion.
(And good thing too. Ego Draconis was so frustrating, the only reason I powered through it was because I liked the world (especially, yes, Sentinal Island and the Battle Tower), the whole turning-into-a-dragon thing and just the concept of Dragon Slayer-turned-Dragon Knight. The Dragon Knight Saga is a lot less frustrating and so a lot more fun.)
But anyways, like I said, I read it on the Internet and I sadly can't find the source again. So I can't say for certain if this true. But considering the state of Ego Draconis and the fact of the existence of the Dragon Knight Saga, I'd lay odds in favour of there being a kernel of truth in there.