ABC Records was pretty much out of the quad business by 1975, at least as far as putting out new releases. They also had a hell of a time mixing and mastering the stereo version (see here) so I think they were probably as keen to get as far away from it as possible.
We can only hope that Elliot Scheiner can/has/will do a 5.1 version someday - it's already been confirmed that a 5.1 mix of Pretzel Logic is in the can, so hopefully he was able to do the same for Katy Lied.
An advance ad in Billboard back in the day had the title as "Catty Lies" or something like that. For some reason there's a photo of a katydid (or bug like it, a locust or grasshopper) the band finally decided on, and called it "Katy Lied" instead, though what any of it meant remains beyond me (I think more than a few folks were smoking something potent during the album's production--and post production, apparently).
Some good stuff on it, but not holding my breath waiting for any Dan 5.1's, doesn't seem to be on anyone's radar.