It's not dead, it's just really slow. The 2.7 release has been very long in the making, released only 18 months ago. There are stabilization releases to it still coming out. There's a tiny, but dedicated group building it and it shows. Jython 3 is possible if you're willing to put your money where your mouth is.
There's been an imminent 2.7.1 release for a while now, so that will likely eventually ship.
AIUI, some of those who were paid to work on it previously are now doing so only in their spare time.
Yes, that would be true on all counts :) as one of those Jython maintainers. Jython 2.7.1 is currently bottlenecked on finalizing support on Windows for pip/setuptools. It should be the last fix.
AFAIK Jython supports Python 2.7.. so it seems dead because Python 2.7 is dead. (I am not a big fan of Jython myself, being a big fan of Python 3.)