I was actually at a Student Conference this morning, and Prof. Norton was in attendance. We had a chance to ask him some questions, and Grangegorman was very much to the forefront of the discussion, understandably.
He said that the media has sensationalised it a lot and confirmed that the development will take place.
He said that only about 20% of the funding was coming from the government. The source of the other 80% was still being sourced as originally planned.
Aside from that, it hasn't been scrapped, it has been delayed by 1 year. Payment will be made for the project, only it will be one year later than was originally planned. Grangegorman is a priority one project for the Government, and the minister said as much in his speech yesterday if you read the full transcript and not just the bit that was aired on TV.
Prof. Norton also said that it won't delay the project by much at all, as they are simply going to reschedule the building works.
Another point he mentioned is that the college already has a substantial amount of money in the bank for use on the development, and that the An Board Pleanala hearing will be in the very near future, within the next two weeks, he didn't have the date to hand.
The rest of the conversation we had with him was under Chatham House Rules, so I can't go any further into what he said.
TL;DR - The project is still progressing, however it will be in a slightly different order to what was originally planned.