Dactyl Joust was playable, artwork and box design probably exist.
(Email conversation with Jaguar programmer, name withheld by request)

Sure enough, it existed. It was far from finished, however. You could fly about the arena and bop, lance and fireball things. There was some rather simple enemy AI, sound and a few keen special effects. One of the nicer things was that it was RGB based, not CRY, and therefore rather pretty. Very careful manipulation of the shading let me still do some depth cues and use the green channel for some pretty wacky field effects. The game was probably half a year of solid work from completion. But at that point, everyone who could've paid for continuing development felt it was time to move on to Playstation, so both Dactyl Joust and TRF (Mortal Kombat style fighting game - I didn't know actual MK-II was in the works?) got shelved.
For Dactyl Joust, we were using an automatic memory paging system which was started with Ruiner. This worked by augmenting function calls to load in each function in 256-byte chunks, as many as needed, and doing address fixups. Rarely called support routines remained in main store, specially tagged to avoid being loaded in. (See above re: running from main RAM and crossing page boundaries. The addresses had to be guaranteed by creating a million sections in the link file. Can you say link file nightmare?) In the end though, C and eventually C++ use became pretty invisible (read easy and efficient) even on the GPU RISC processor. Going back and looking at Jaguar code again when I did Tempest/X3 for Playstation was a total trip. Even just a couple years later, I'd forgotten how fun/weird/ugly that beastie was. I honestly miss it though. I really do. For all its quirks (especially because of its quirks!) It was a great little box.
(Slashdot posting by the programmer)

JOUST has been spoken of in gaming publications as a hidden game, residing inside another Jaguar game. Atari is being very tight-lipped about Easter Eggs and the like in any Jaguar games, and the only comment I have been able to obtain about "goodies" was this, about TEMPEST 2000: "There's certainly enough room inside it [the TEMPEST 2000 cart] -for- another game."
(AEO 3/5)

Another game, 'Dactyl 2000, is due next spring from Atari - this one is slated to be an exciting first-person rethinking of the original Joust. A lot of enthusiasm has been expressed for this one, and we'll forward to you the latest information as soon as it becomes available.
(AEO 3/12)

According to Bill Rehbock Atari's VP of Software Business Development, "`Dactyl Joust' will bring the classic game alive as a first person perspective, fully texture-mapped Joust in a realistic, three dimensional environment." Atari will market these games for the 64-bit Jaguar system while Williams Entertainment will license and market them for high performance PCs.
(AEO 4/4)