Still mad that I debunked your perception of the Halo universe?
There was an article on the old bungie.net where they talked about the Halo 2 engine. In it, they said they basically had to scrap a majority of the original Halo 2 engine that they used for the E3 2003 demo and make it again because the original had become too bloated. The E3 2004 demo was the first we saw of that new engine and is why everything looked so different. That's also why they couldn't finish the game the way they intended and why we got a cliffhanger ending. So, yes, they did rewrite it. They reused some of the old code, but they still started over. That's not to say they scrapped the entire game; models, textures, sounds, scripts, etc. were all probably kept for the most part.
@ejburke: The Gravemind you encounter in the Halo games is not the same one that attacked the Forerunner 100,000 years ago. The Flood have a trait that lets a Gravemind recall all the events of its predecessor. However, we don't know if this precludes the simultaneous existence of multiple Graveminds. This is all coming from the Halo Encyclopedia, by the way.
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