Well, here are some actual facts as best I understand them:
The production did shorten its run in LA, and is taking a hiatus of six weeks in order to re-tool, so that the number of trucks necessary to move the show from city to city will be significantly reduced, thus lowering costs. The show will reopen in Costa Mesa on Sept. 6, and continue as planned with the same cast. So, no, the show is not going non-AEA. From the reopening on, the plan is continue for 32 weeks.
Interestingly, the production has generally received very favorable reviews. Some have not been good, but most have been good to excellent. As examples, here are two, the first from the Pittsburgh Post-Gazette and the second, the most recent review from the LA Times:
http://www.post-gazette.com/pg/10126/1055855-325.stm http://latimesblogs.latimes.com/culturemonster/2010/07/theater-review-young-frankenstein-at-the-pantages.html In spite of pretty decent reviews in most venues (including some down and out raves), ticket sales have not been booming. I have friends who saw it in Chicago, DC and Houston and all found it thouroughly entertaining, but it's certainly not for everyone.
CZJ at opening night party for A Little Night Music, Dec 13, 2009.