We have decided to save the Saruman sequence for the DVD. It's a great little scene. 7 mins long. Chris is wonderful, as usual. Brad is in about 6 shots. It was a film maker decision - nothing to do with the studio.
The problem is that the sequence was originally shot for The Two Towers, as it is in the book. Since The Two Towers couldn't sustain a 7 min "wrap" after Helm's Deep, we thought it would be a good idea to save it for the beginning of the Return of the King. The trouble is, when we viewed various ROTK cuts over the last few weeks, it feels like the first scenes are wrapping last year's movie, instead of starting the new one. We felt it got ROTK off to an uncertain beginning, since Saruman plays no role in the events of ROTK (we don't have the Scouring later, as the book does), yet we dwell in Isengard for quite a long time before our new story kicks off.
We reluctantly made the decision to save this sequence for the DVD. The choice was made on the basis that most people will assume that Saruman was vanquished by the Helm's Deep events, and Ent attack. We can now crack straight into setting up the narrative tension of ROTK, which features Sauron as the villian.
The Scouring of the Shire has been a subject of much debate - and for many fans (myself included) it's been hard to imagine the series ending any other way. Frodo MUST sail for Valinor at the end, and how can he get to that point without having fought evil in his own backyard? How else to put Merry and Pippin's growth in their proper context? I won't deny I am profoundly disappointed. But I trust Peter Jackson completely. And maybe we will see the Scouring yet someday.