> my impression is that work on MorphOS had begun before those discussions.

Yes, of course. It was Olaf "olsen" Barthel who presented MorphOS to Amiga Inc.

> I don't know what state of completion MorphOS was in, when talks with McBill took place.

It was the time of MorphOS 0.4 to 0.8.

http://www.amiga-news.de/en/news/AN-2001-02-00161-EN.html
http://www.amiga-news.de/en/news/AN-2001-10-00203-EN.html

> Amiga Inc.'s position of wanting to contract people to create something
> for a price, and to then own what Amiga Inc. had paid for

According to what is known about those discussions, they were never about Amiga Inc. paying for the development but about Amiga Inc. merely throwing in the "Amiga" naming rights and maybe a Workbench license (Ambient came only later).

> at the time we still had several hundred thousand users willing to buy AmigaOS4.x

I think it was one order of magnitude less.