Acti-Bliz working on DJ Hero, says source

MTV's rumouring that Activision is indeed working on DJ Hero - the trademark first appeared in February - but is finding work on the game tough due to licensing issues. From the piece:

We're told the mash-up mechanics make for a "really good" game but are proving to be a "licensing nightmare" when dealing with the music labels. As a result of the merger with Vivendi, however, Activision Blizzard now has direct access to the Universal Music Group.

Other than "DJ Hero," Activision Blizzard has trademarked a number of unannounced music products that have yet to come to fruition, including the games "Guitar Villain" and "Drum Villain." It was later confirmed that the "Drum Villain" development was rolled into the company's upcoming band-oriented "Guitar Hero: World Tour."

More through there, if that floats your boat.