If it's only marginally better than a 7970, they're really going to tarnish their brand. The X80 GPUs from nVidia have almost always been the best single GPU card that you could buy at a given time, and usually be an appreciable margin.
It would be much better to release a competitive product (or even a worse one) as the 660. Even if it's not as good as the 79XX series, it will let people know that nVidia's performance card is in the same league as AMD's top card and that nVidia's best card is going to be nothing less than amazing.
Seems unlikely, especially given other details. Other companies haven't been complaining about yields and we already know that GK100 has been canceled. Other nVidia chips may be having similar problems, ergo the yield problems. My best guess is that their design is overly ambitious, which makes sense if even Charlie of all people is saying it's really good, but runs into issues when theory meets practice.