[quote="lemon_squeezer2"]It was brought about by those Bionicle type figures, and when some rumors and photos were leaked, there was a HUGE uproar (I remember it distinctly

) Therefore, Lego slapped together a minifig line [/quote]
Sorry, but that's not at all true. From some searching around on Lugnet, the first hint of the large KK2 action figures seems to have been around November 18, 2003:
http://news.lugnet.com/castle/?n=18560
(IIRC, there were rumors on 1000steine.de a couple of weeks before that based upon text descriptions of the knights.)
Then a week after that Jake stepped in, implying that a system-scale line was on the way:
http://news.lugnet.com/castle/?n=18627
These pictures are from the U.S. Toy Fair in the first or second week of February 2004, but there were similar pictures for a European Toy Fair a couple of weeks before that:
http://www.fbtb.net/toyfair/2004/2004.asp
And C-C.com got (prototype) pictures of these sets at about the same time:
http://www.classic-castle.com/archives/200402.html
So, to fit your time scheme, there would be at most a two-month time frame between saying "Oh, Megablocks!!! The AFOLs who make up 10% of our buying public really dislike these figures that are marketed to little kids! We've got to do something!", and the point where they had sets 90% of the way to production (some of the box art changed, a couple of molds weren't done yet). In that time, in this theory, they designed sets, came up with a marketing scheme, tested these with focus groups, made some new molds, and got everything ready for the Toy Fair rollouts, all during Christmas, which is not exactly the slowest part of the year for a toy company.
I sure wish we had that kind of power, and that TLC had that kind of turnaround time. Unfortunately we don't and they don't.
Bruce