Popping in from my 3-month stay in the Goblin Kingdom...
Actually, I'm astonished. I thought most people would be in favor of a sequel and I'd have to be the voice of reason. But since people understand pretty well how it can go wrong, I'll have to emphasize the other side of the coin: yes, it can be done right.
Sequels that work: films that build on the ideas of the original while giving us fresh new ideas; often darker than the original. Examples: Empire Strikes Back, Toy Story 2, Lethal Weapon 2, Terminator 2, Back to the Future II, Indiana Jones and the Temple of Doom.
Sequels that don't work: films that rehash what was done in the first film in order to make more money, with no spark of originality of its own. Examples: NeverEnding Story 2 (I liked the original, BTW), Return to Oz, any of the Disney direct-to-video sequels, any slasher film sequel, and (here's the one that's gonna get me in trouble) Austin Powers 2.
Jamie and I had a discussion about this very topic on the old MC board. I agree with him 100%. Get Cyndi to do it, and let the story revolve around Toby (who would be about 16 years old now -- around the same age as Sarah in the first movie). Oscar winner Jennifer Connelly can appear in the film, but it's probably best if it's only a cameo. Let this be a fresh story, where some of the original characters return, but it's largely new and exciting places in the Goblin Kingdom that we haven't seen yet. For that matter, it doesn't even have to be set in the Labyrinth. The original was not a hit for the Henson Company; if they call it "Labyrinth 2," it might seem the same to the rest of the public as making "Hook 2." (I also liked the original film of that, but it also didn't do well.) Let it be an all-new adventure set in the Goblin Kingdom. The public's appetite for dark fantasy is greater now than it was in the '80s. Let's give this film a shot!
While we're at it, Jennifer Connelly needs to do something with the Muppets again. But not a sequel to "Labyrinth." Maybe something with the classic Muppet characters?
Hey, it's all wishful thinking anyway, so I might as well shoot for the stars.
BTW, Jamie, for other good Cyndi performances, check out "Life with Mikey," starring Micheal J. Fox. It's not a great film by any means, but Cyndi's part in it is hilarious!