Diablo III? Don't hold your breath.

Gamespot recently reports Blizzard is bulking up the Diablo dev team based on the new Job Descriptions posted on Blizzard's website, which states "The team behind Diablo I and II is looking for..." As a former member of the the team behind Diablo I and II, I can say this -- this is another way of saying the people from Blizzard North need people to replace the ones who didn't depart to Irvine.
I think it's also fair for me to say that I can count exactly 1 person who would have been on the team for Diablo I and Diablo II still working for Blizzard, and less than 6 who would have done production work on Diablo II. Most of the people who had any inkling of how to design a Diablo game have already departed, either because they didn't want to move to Irvine or they didn't want to work on the project.
Could they take whatever the North team was working on for the years since Diablo II expansion and run with it? Sure. That's always a possibility. But Blizzard has a reputation, one for quality that hasn't been soiled by the patching of WoW -- they'll apply some of the old Blizzard polish, and they won't ship something incomplete, so even if they announce at E3 it would be a minimum of a year and a half before they will be able to shove something out the door. Which I secretly believe is too optimistic, seeing as Starcraft Ghost has been in perpetual limbo for over 3 years.