Several things went wrong about the project, some of which caused a domino effect that we're still working our way out of.
The big strike was the court injunction the SOS group got which stopped construction on the line for six months -- an injunction that was granted by a three judge tribunal that included one judge who was later found to be in a clear conflict of interest. When this was discovered, the injunction was quickly overturned and the judge is now facing disciplinary charges, but the damage was already done. Tenders were knocked out of schedule, and the tendering process had to be restarted in a number of instances, further delaying the project.
There was also great difficulty in coordinating the work between the City of Toronto (TTC) and the City of Toronto (Hydro). The TTC crews have been largely at the mercy of Hydro crews in terms of burying the Hydro wires, and this hasn't been limited to the St. Clair project. The lengthy delay to the reconstruction of the tracks on Fleet Street was also affected by this.
The project was also afflicted by sheer bad luck, from problems with the setting of concrete, to the shocking (ha) discovery of electrical wires in the trackbed that weren't described in the original plans.
That said, the TTC should share some of the blame, especially with how relations between the project and SOS deteriorated. Though the project was supported by a majority of ratepayers in the neighbourhood (witness vote results from the 2006 election, and the organization of SCRIPT), TTC planners still went into some meetings with the attitude of "this is what we'll build, take it or leave it." Concerns over loss of parking space, left turn lanes and, most importantly, sidewalk space, were glossed over. This attitude problem has been noted at other TTC public consulting meetings, and the adversarial relationship between the TTC and SOS was the result.
As for the burgeoning cost, this was the result of a fairly simple project (the initial idea of upgrading the St. Clair tracks as part of scheduled maintenance was budgeted at just $6 million more than what was already budgeted for the scheduled track replacement) becoming something of a Christmas tree which had all sorts of things hung on it. The movement of Hydro wires was not part of the original project. Then there were plans for new street furniture and a beautification program until we were flirting with a $100 million price tag. This was likely the result of a modest project moving forward with little oversight. It grew organically, and overgrew.
Transit City at least has been launched as a major project rather than "hey, we have an opportunity here to do something on the cheap". It requires a full EA and extensive design, and should be under greater control. It also travels along streets which are, by and large, wider than St. Clair, resulting in fewer compromises.
...James