According to this article by the Detroit News, the UKAA is telling them that Alex Legion is still pursuing a transfer from UK.
He is apparently not practicing with the team, so that would indicate to me that he is no longer on the team. Of course, my recollection is that Joe Crawford went through something similar, and until the Coach officially invites Legion to rejoin Kentucky, I think it's safe to say that he is no longer a Wildcat.
I have no doubt that this report is not all there is to say, but this seems to reflect the "official" line for now. Whether or not it changes is something that only time will tell.
Update [2007-12-5 17:29:28 by Truzenzuzex]: Matt Jones also has this post on his site.
Update [2007-12-5 18:7:3 by TheFakeGimelMartinez]:: Evan Daniels of Scout.com is reporting on Matt Jones' Kentucky Sports Radio currently that Alex has rejoined the team, but has not talked to Alex directly. I want to believe.