The reformation of an eyewall has actually been more or less foreseen by models, and in fact has been foreshadowed in earlier Discussions from the NHC.

The reason for this is primarily because shear is relaxing as the cyclone begins its recurvature back towards land, and at the same time the center is traveling over a locally warmer pocket of water.

While it is possible that Sandy retains distinctly tropical features up through landfall, extratropical transition has already begun, with the western portions of the cyclone merging with the stationary front that is draped basically N-S just inland. Moreover, water vapor images depict a cyclone that more resembles a mid-latitude neutral to cold core system than a tropical hurricane. And most telling, the regions of strongest winds have lied in belts well away from the center for some time now.

Sandy is basically a Subtropical Hurricane. In reality, these hybridized hurricanes have some history of being more damaging and deadly than their purely tropical counterparts of an identical Saffir-Simpson category. Keep in mind that the Saffir-Simpson is merely a 1-5 category of the maximum sustained winds regardless of how large an area they cover, or how frequently they are occurring.