I have read several reports that he is returning in some ghost/zombie form but that doesn't really sound like a playable character to me. That sounds like something that would be in the Konquest mode and possibly as a hidden character. I don't really see him in the backgrounds of the characters either, one commonly said to be Kang I think more likely reflects Sonya.

If you can find a link to a report with a conformation that Kang is a PC please post it here. I ask this because Mortal Kombat has one of the most gossip oriented communities of any game lol. =)