I guess there are two separate kinds of expectations about Yalp :
1) It's pretty clear by now that 1.3 isn't getting much attention from the play team, so people that have invested in play 1.x would like to see it being actively developed. They would like a solution with little to no migration.
2) On the other hand, there are people that are not really tied to play1 or ready to put some efforts into migrating, they are mostly looking for an alternative because they are unhappy with play2 scala nature, they find it slow to compile (a single change in a template file followed by a refresh in browser takes easily 8-15 seconds).
I belong in group #2.
Choosing to be 1.3 compatible could be interesting for you because it may attract some play1 adopters that didn't make the move. However, if you're planning to work on a v2 with a lot of breaking changes, you can be sure that you will deal with a lot of unhappy people saying that you're doing exactly the same as play team did before.
So I'd say : if you want to continue developing play1 it's fine but if your goal in the short-term is to to release you own major version of the framework, it's better to take that road directly as I don't think it is a good idea to do it step by step. You would be stuck with a lot of legacy code and a lot of unhappy users asking for backward compatibility.
If it was only about me, I'd avoid being stuck in supporting an 1.35 branch and move ahead. Where exactly? It's simple, see play2. People were angry about the incompatibility with play2, other than that it's a very elegant web framework. Keep the routes file, remove the scala nature, use a solid, compiled template engine like japid (or perhaps rythm) that offers error checking and fast compilation time and you'd have an excellent java framework. I wouldn't even try to be "full stack", support for Spring, guice, Ebean or hibernate can be provided by dedicated modules, a simple connection pool would be enough as a start and people could use their own favorite persistence framework as a separate module/library that they can independently upgrade to newest versions. It means less maintenance on the core and more liberty for future changes.
What I like about play is the MVC stuff, compiled views templates and the "hit-refresh-button" deployment. Other than that, nothing has to be part of the core, people should be free to use whatever they prefer for persistence, dependency injection and such.
That's my opinion (you asked for it after all ;-) ), I am in no position to tell what is right or wrong but in any case, you should really decide asap whether you're maintaining and improving play 1.x or rather developing something different while preserving play1 philosophy.
Best