As of yesterday, the iconic boathouse portion of the ride has been demolished (according to a recent post by hatetofly at Orlando United, and a photo by King K at Orlando United):
http://www.orlandounited.com/forums/showthread.php?6723-The-Amity-Demolition-New-Ride-Construction-Thread&p=216436#post216436
http://www.orlandounited.com/forums/showthread.php?6723-The-Amity-Demolition-New-Ride-Construction-Thread&p=216438#post216438
They're also demolishing some of the Amity structures, as a hole was made on one of the buildings as of the 23rd.
Meanwhile, it looks like markers are appearing in the backstage road behind Revenge of the Mummy and SS33, leading from the JAWS/Amity area all the way to the Sinbad area (according to the latest Screamscape update):
2014 - Jaws Replacement / Potter Phase 2 / Project 722 - (1/26/12) Screamscape sources tell us that those new survey markers spotted backstage behind Universal Studios Florida actually do run down towards the backstage area behind the Sinbad stunt show at Islands of Adventure.
(1/23/12) According to once source demolition work in the old Jaws area has been going full steam ahead this week, as Amity will soon be nothing more than a giant muddy crater as the work crews are said to be moving quite fast on this. Elsewhere, sources tell us that a bunch of survey markings can now be found all along the main backstage road leading towards the Jaws / Amity area. No word yet on if they stretch all the way from Amity to the Wizarding World at IOA or not, but this sounds like the start of the Hogwarts Express to me. So far markings have been spotted in the area behind Soundstage 33 and down behind the Revenge of the Mummy attraction building.
I think we're all in agreement that this is the route for the Hogwarts Express, connecting the JAWS/Amity area to the original WWOHP.
Also worth noting, on January 20, Universal filed a permit for the demolition of two buildings in the Lost Continent:
On January 20th, 2012, Universal filed permits for the demolition of building 234A and a tent located within The Lost Continent. A quick look at some old construction plans and aerial imagery reveals that building 234A is “The Frozen Desert” building and the tent is directly behind it. Both structures are located just outside the Wizarding World of Harry Potter, which begs the question, could we be seeing early demolition work in preparation for the Wizarding World’s expansion?
Given the proximity of both buildings to the Hogwarts Express prop, and their direct line of access to the back of house roadway connecting both parks, it kind of makes you wonder if this is in any way related to the rumors of a ‘real’ Hogwarts Express train running between the current Wizarding World and its expansion in the former Amity area of Universal Studios. If they were to build an actual Hogwarts Express train ride, it stands to reason that they’d either keep the existing train prop on display outside the station, or remove it and re-purpose the area it once occupied as the station, to avoid confusion among returning guests.
But perhaps we’re looking too far into this, and there’s an entirely different reason why these two structures are being removed. I guess only time will tell. Below you’ll find several images detailing the exact location of these two structures as well as the demolition permits. What do you think?
http://parkrumors.com/lost-continent-demolition-evidence-for-hogwarts-express/
The bolded part is exactly what I think is going to happen. I think the Hogwarts Express display/Frozen Desert building/Tent will all be removed for the Hogsmeade Station, with the entrance possibly taking over the Hogwarts Express display. The train would leave the station and travel between Dragon Challenge and Sinbad, transitioning into an indoor tunnel, with the entrance disguised as a cave entrance (outdoors for the part before). The tunnel would include the rumored 360 3D effects, and last for a majority of the train ride. It would travel behind the Sinbad theater and into the backstage road. It would enter the JAWS area at Kings Cross station (the plans state for the station (or another attraction) to be in the southeast plot of Amity, so maybe the station can go over the walkway (queue or track)).
This is getting interesting! Hope to hear more!!