Jackman has apparently left talks not because of the concept, but due to a scheduling conflict. (Maybe it's Drive, since everything else has vanished from his IMDB page.) Ray Winstone remains in discussion to play Julius Caesar, and Zeta-Jones is still rumored to be Cleopatra herself.
I may be one of the few celebrating the news. I know Soderbergh is a master of taking preposterous concepts and turning them into cinematic brilliance, but a Cleopatra rock musical just sounds like a spectacularly bad idea. Jackman is a wonderful stage performer, and I've been dying to see him in a movie musical for years. (If you've never seen his pre-Wolverine turn in Oklahoma!, do yourself a favor and rent it now.) But not this one -- Soderbergh or not, it just sounds too campy to be believed.
Since Variety is stumped as to what caused the schedule conflict, I'll make a New Year's wish and hope his production shingle has decided to really get moving on that remake of Carousel. Jackman has had the rights to it for awhile, and to see him singing and dancing in that is ten times better than seeing him as a rocking Mark Antony.