Production overhaul and changes
Upset that Allers left the project, Eisner gave Fullmer two weeks to salvage the project or production would be completely shut down. In December 1998, Fullmer and Dindal halted production for six months to retool the project, renaming it from Kingdom of the Sun to Kingdom in the Sun, thus making it the first Disney animated feature to have an extensive overhaul since Pinocchio. Meanwhile, following Eric Goldberg's pitch for the Rhapsody in Blue segment for Fantasia 2000, the animators were reassigned to work on the segment.
Story work on the revised film started when they knew what to retain from the original version, namely Spade as Manco and Kitt as Yzma, with the remaining elements to be written around those characters. Chris Williams, who was a storyboard artist during Kingdom of the Sun, came up with the idea of making Pacha an older character as opposed to the teenager that he was in the original version, as to be the opposite of Manco. Following up on the new idea, former late-night comedy writer David Reynolds stated, "I pitched a simple comedy that's basically a buddy road picture with two guys being chased in the style of a Chuck Jones 'toon, but faster paced. Disney said, 'Give it a shot.'" One of the new additions to the revised story was the scene-stealing character of Yzma's sidekick Kronk. Kronk was inspired by actor Rick Rossovich, according to Williams, and as they wrote for him, Reynolds immediately thought of casting Patrick Warburton for the role based on his character Puddy from Seinfeld. Meanwhile, the name Manco was changed to Kuzco following Fullmer's discovery of the Japanese slang term manko, which translates to cunt. Due to in part to the production shutdown, Sting began to develop schedule conflicts with his songwriting duties interfering with his work on Brand New Day, his new album that he was planning to record in Italy. Sting admitted, "I write the music, and then they're supposed to animate it, but there are constantly changes being made. It's constantly in turnaround", but added, "I'm enjoying it." Because of the shutdown, the animated film Dinosaur assumed the summer 2000 release date originally scheduled for Kingdom.
Andreas Deja declined to return to the film after observing his more serious version of Yzma was incompatible with the new comedic tone of the film, and moved to Orlando, Florida to work on Lilo & Stitch. Animator Dale Baer would replace Deja as the supervising animator for Yzma. Fullmer would inform Sting by telephone that his songs, related to specific scenes and characters that were now gone, had to be dropped. Bitter about the removal of his songs, the pop musician commented: "At first, I was angry and perturbed. Then I wanted some vengeance." Disney eventually agreed to allow three of the six deleted songs as bonus tracks on the soundtrack album, such as Yzma's villain song "Snuff Out the Light", the love song "One Day She'll Love Me" and the dance number "Walk the Llama, Llama". The plot elements, such as the romance between the llama herder Pacha and Manco's betrothed Nina, the sun-capturing villain scheme, similarities to The Prince and the Pauper story, and Inca mythology were dropped. The character of Huaca was also dropped, although he would make a cameo appearance as the candle holder during the dinner scene in the finished film. Kuzco—who was a supporting character in the original story—became the protagonist.
In the summer of 1999, cast members Owen Wilson, Harvey Fierstein, and Trudie Styler were dropped from the film. Kitt and Spade remained in the cast, Dindal commented, "[a]nd then John Goodman and Patrick Warburton came aboard." After Sting's songs for Kingdom of the Sun were dropped from the new storyline, Sting remained on the project, although he was told by the studio that "[a]ll we want is a beginning and an end song." The song, "Perfect World", was approached "to open the movie with a big, fun number that established the power of Kuzco and showed how he controlled the world", according to then-Feature Animation president Thomas Schumacher. The filmmakers had asked Sting to perform the song for the film, although Sting declined by telling them that he was too old to sing it and that they should find someone younger and hipper. They instead went with Tom Jones, who is eleven years older than Sting.
In February 2000, the new film was announced as The Emperor's New Groove with its new story centering on a spoiled Inca Emperor—voiced by Spade—who through various twists and falls ends up learning the true meaning of friendship and happiness from a poor peasant voiced by Goodman. The release date was shifted to December 2000. Despite the phrasing of the title, the film is not related to Hans Christian Andersen's classic Danish fairy tale "The Emperor's New Clothes", although both stories involve an emperor being tricked. According to Mark V. Moorhead of the Houston Press, the film's plot bears some resemblance to that of The Golden Ass by Apuleius, wherein a man is turned into a donkey.
Eisner cited concerns regarding tonal similarity to Hercules (1997), aiming to avoid repeating the commercial underperformance of that film. Dindal and Fullmer assured him that The Emperor's New Groove, as the film was now called, would have a much smaller cast, making it easier to attract audiences. Towards the end of production, the film's ending originally had Kuzco building his Kuzcotopia amusement park on another hill by destroying a rainforest near Pacha's home and inviting the former and his family to visit. Horrified at the ending as an environmentalist, Sting commented: "I wrote them a letter and said, 'You do this, I'm resigning because this is exactly the opposite of what I stand for. I've spent 20 years trying to defend the rights of indigenous people and you're just marching over them to build a theme park. I will not be party to this.'" As a result, the ending was rewritten, and saw Kuzco taking the decision to construct a shack similar to Pacha's to spend his vacation among the villagers.
