outlaworacle wrote...
multiplayerblog.mtv.com/2009/02/11/why-dragon-age-isnt-a-trilogy/
They've said next to nothing about the sequel, but what little they have said suggests it will not in any way continue the storylines of the first game. It was not designed that way. I know people love the baby Old God and I could certainly imagine a DLC detaling how that plot resolves for those of us who want it, but in this and a few other articles, developers have stated they have no plans to continue this story. Even if they did, it'd be a slap in the face to anyone who didn't choose that ending, and the idea of playing as the baby Old God in the next game is so cliche if Bioware pulls that... ugh, well, I have faith that they won't resort to such a bad idea. The beauty of this game is it's open ended nature. When you start making endings canon and forcing everyone into one origin, we're talking about backwards growth there.
Spitball all ya want, just wanted to pop in and tell everyone they are wrong lol 
The article doesn't actually mean that DA 2 will or will not be a sequel to the first game, it just means that DA is intended to be a franchise with a number of branches. It is already shaping up this way, with the flashgame, the PnP game and rule-set out, the books Gaider is writing etc, it could be that they intend it to be a franchise for different stories in the same way say Star Wars is a franchise (with many stories and time periods now it that universe, including Bioware's KOTOR and the Old Republic) but of course the main films are still sequels/prequels to each other. So I don't think we can say whether DA 2 will or will not be a direct sequel to DA atm.
As for the topic of the thread, I could certainly see them writing the story of DA 2 with Morrigan finding a why to gain the Old God soul even if your PC choose to sacrifice themselves, and therefore the PC continues in the fade (since the Archdemon's soul wasn't destroyed neither was yours), however I can't see for sure how this would be able to account for what would happen if Alistair or Loghain took the death blow (unless they appear to the PC somehow in a vision or something.)
That said, I'm not sure it's a good idea, doing it kinda overrides the choices that people made in this game, and personally I think that player choice should be respected as much as possible for the next game (in this respect maybe they will choose to make the game involving completely new and different characters, avoiding any of these problems, though personally I'd miss the characters I've meet in DA )