The failure to get the film out in any reasonable amount of time helped bring down Ron Miller's regime at Disney, and its financial failure ensured that he would never work in Hollywood again.
Co-directors Ted Berman and Richard Rich were also fired from Disney in the wake of the film's release; Berman never worked in animation again, while Rich ended up having to start his own studio in order to continue his career.
Of course, Jeffrey Katzenberg, who initiated all the Executive Meddling, continued running Disney for several more years, before sucessfully starting his own company, DreamWorks Animation.
Executive Meddling: The film was originally intended to be the beginning of a Darker and Edgier Disney, aimed more at teens and young adults. It was originally much more graphic and violent. However, at the last minute, the Disney execs changed their minds and cut several completed scenes.
Old Shame: Disney went to great lengths to disassociate themselves from the film. For example:
They opened a Black Cauldron-themed restaurant at Disney World ("Gurgi's Munchies and Crunchies") in anticipation of the film's release. Once it bombed, they closed the place down then later remodeled it into a Beauty and the Beast themed establishment (which is now replaced with a Robin Hood establishment).
It was because of The Little Mermaid that this wasn't given a video release sooner — according to the IMDb, Disney was all set to release it when the latter film became a smash hit and they were pressured to get it on video ASAP. Because this movie was both atypical and unpopular, it wasn't released to video in North America until 1998.
Maybe not so much now. The movie received a digitally restored DVD rerelease during its 25th anniversary, which even got promoted on some higher-profile DVDs.
The Other Marty: Hayley Mills was originally cast in the role of Princess Eilonwy and hosted a behind-the-scenes special on Disney's Wonderful World in which she introduces herself as the voice of said character. Then, for reasons unknown, Mills was replaced.
What Could Have Been: The film was initially meant to be even darker, but many scenes was cut before it's release. They have yet to appear in bonus materials. A few cells have been leaked online from the infamous cut scene called "Murder by mist" where one Mook was disintegrated on-screen! It's been said that the violence and disturbing imagery that was cut from the film would have made this a PG-13 or even an R-rated animated Disney movie.