They have apologized and appear to have backed off from their cease-and-desist. (I don't see anything explicitly allowing the "Ravelympics" by name, but at least they're not saying "Oh, you zany knitters, you are disrespecting the athletes" any more.)
(h/t +Amanda Helstrom)
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NPR.org » After Knitters Get In A Twist, USOC Apologizes For 'Cease And Desist' Letter
After Knitters Get In A Twist, USOC Apologizes For 'Cease And Desist' Letter. AP. Note to the USOC: Those are balls of yarn, not puts. Published: June 21, 2012. by Mark Memmott. It wouldn't seem to be…
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I’m happy about that. Now I will be able to watch the Olympics and not have to write all those protest letters to the sponsors.
I’m not happy enough about what the USOC said and did. I don’t tend to watch the Summer games because none of the sports in it keep me fascinated.
@Marina – I tend not to watch them largely because the US Sports TV have decided to make them less about athletic competition than about Patriotic Sports Dramatic Personal Stories. I.e., show only events where the US is likely to win a medal, and spend at least 50% of the time on heart-warming biographies to give the viewer a personal emotional stake in rooting for Our Hero.