GameSpot tipster, and we have confirmed that Fable 2 has been pulled from Xbox Live in both its episodic and Games on Demand forms. Associated Fable 2 content, including DLC, trailers and avatar items, is still available for download. Furthermore, both the original Fable and Fable 3 remain available to download.
We've put word into Microsoft to see what's up. It's too early to be certain, but we suspect Hobbes were involved.