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I would not be at all surprised to see a 27" 5k screen, in some form, re-appear on the new imac. Maybe slightly different panel with smaller white bezels. It is the lazy way to keep the costs down I suppose.
 
The 5k display is what keeps me on 27” iMac. It is simply the best display I have ever used. I love everything about it - size, resolution, DPI.

I tried a mini with my other displays I use with Linux/Windows boxes. LG 2560x1080 21:9 25”, LG 3840x2160 16:10 24” and Acer Predator X34P 21:9 34” curved 3440x1440P. All displays had sleep/wake issues and Apple support acknowledged this inviting me to return the mini for refund as they had no solution. Aside from this I could not live with the 110PPI having got used to highDPI.

I had a look at the iMac 24” and found the display just too much of a compromise from the 27”. I decided I would rather pay a premium to have a replacement of the 27” than compromise to a 24” or a mini with third party display (and all the hassles that brought me at least).

I hope for a 27” replacement with >=5K, ideally more CPU/GPU cores in tweaked M1, 16GB fine for me though option for 32GB would be nice. Connectivity of 24“ would be enough - as long as there is at least one TB4 I can connect to an external hub if needed then I am happy enough!

Fingers crossed …
Totally agree with you here. The screen size and PPI are crucial to me and it's been unparalleled with the 27" 5K. Thing is, there's no way of know when the 27" (or slightly larger) iMac will be available given supply chain issues.

I'm toying with the idea of a M1 MacBook Pro to drive a 32" LG monitor (https://www.displayspecifications.com/en/model/b9b81f2c) which purportedly offers 140 PPI, but who knows if it LOOKS as sharp and clear as promised.

And as you noted, there's always the real-world obstacles of third-party monitors working harmoniously with the Apple hardware and software.
 
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