Yeah, I'd like to know how that rumor got started--I've certainly never read anything from him saying that was a possibility. As much as I would love GDL in a Victorian/steampunk WH13 spinoff with Sherlock Holmes references, I think people are doing the ol' 2+2=5 deduction. In fact, I'll be pleasantly surprised if he survives the episode (although that wouldn't necessarily affect his appearance in the proposed spinoff, from what I've read about the idea).

Anyway, it's all good. GDL sporting a suit in a good ol' days Torchwood-esque TV show? It's like my birthday came early!

(I voted for #1, but I was tempted to vote for your #2 choice just because of the lovely description! LOL)