That was indeed the site of the planned Venetian, and later Mediterranean resorts. Word is that test pilings actually disappeared...
Some year ago they reportedly tested the land again, but the land still hadn't settled. Keep in mind that a lot of the area around the lagoon, and the lagoon itself, is not the original landscape.
It did appear that what they did last year WAS to clear sight lines. At least that's all they did.
There have been rumors about a total- or mostly-DVC monorail resort at that location, but they were mostly non-starters. They appear to have decided to build BLT and the GF DVC instead.
The hot rumor is the River Country location mentioned earlier, possibly dusting off the old Buffalo Junction plans.