Update: I spoke with the BLM gal about the washout last week at the Monticello RMP meeting, they have re-routed the trail to avoid the bypass area, so its good to go.
However, I'm not sure if the sign on the other side is still there or not? If it is they might leave it as a "spur" to go check out the one-time lake. Not sure how they re-routed the trail, its alot further back then the bypass we were all using in the meantime (no climb up the steep slickrock/sand face).
Kind've sucks they couldn't keep the trail close to the old lake, but the terrain just didn't permit it, that canyon is going to keep washing out for the years to come.