>died tragically in a car accident before she could have a crack at the sequel.

That wasn't it. She was busy writing Always and an early draft of Indiana Jones 3 while they were making Jewel, so I guess they must have just decided to give it to somebody else.

Not sure why I've been downvoted, but here you go:

["Thomas's death came six weeks before the sequel to Romancing the Stone, The Jewel of the Nile, was released."](https://en.wikipedia.org/wiki/Diane_Thomas#Other_work_(including_Always_and_an_original_draft_for_the_third_Indiana_Jones_movie)

In other words, she was alive while they were making it, so they certainly had the screenplay long before her passing.