In an interview with LEGO Island's creative director Wes Jenkins from around 2013, he revealed that Mindscape fired the game's entire development team the day before the game was released in order to avoid paying promised bonuses:
"Long story but basically – the industry tradition (back then) was that you will receive product bonuses if you stay to the day of product release. The best solution for them (administrators) at the time was to fire everybody the day before release. There's bigger profits and then [sic] could get their investment money back before the product sells… if you don't have to pay bonuses or continued salaries. They also sold [Mindscape] eventually to bigger companies, which ended up in some legal complications… It was explained to me later when we won best of the show at E3 later that year, that "it wasn't personal – it was just business"."
Lego Island had a large quantity of content that was planned, but never inserted into the game. Content ranges from entering every building including Pirate's Cove, expansion packs that would allow the player to visit an undersea location, and the helicopter as a more viable form of transportation. Most content was cut due to time, budget, and technology constraints.
There is an unused prerendered cutscene that shows the Power Brick flying off the top of the Information Center to heroic fanfare.
There are two unused sound files on the game's disc. One is the Infomaniac saying to put the disc back into your computer, as if you had ejected it. This sound is never played, as the game will crash when ejecting the CD. The second one is the Infomaniac warning you about entering a duplicate username, which in the final game will result in just using the already existing user, instead of overwriting it as suggested by the audio clip.