What became of the CAM-Brain project in Kyoto?
Hah! That's funny, I was just looking for information about this project too. However, I was one of the guys involved (in Robokoneko project, more specifically).

No, it wasn't due to funding issues. Explaining what actually went wrong is a bit lengthy process and goes deeply into philosophy of mind, so to put this as short as possible: what do you think could be achieved in terms of understanding human mind by randomly evolving neural networks? If a being was created, fully aware of its existence, would you be able to tell what led to forming its consciousness? Their goals were absolutely pointless. Costly and hopeless, and with no applications.

There is no need to recreate complex natural processes, especially with (still) very basic understanding of brain machinery, if what needs to be done can be achieved with abstract constructs. My criticism of their approach led to denying me PhD studies and broke my career in science in general. On the other hand, in terms of software and engineering a lot of great people were involved.