I posted it in another thread, but IMO it's clear that at the end of GFII, Puzo and FFC were setting up the potential conflict between Michael and Hagen to be the main basis for GFIII.

My guess is that at the time, they were thinking in terms of doing GFIII in the fairly near future (3-6 years after GFII), and the dual plot line would have covered the earlier years of the Corleone Family (1928-40, based on the chapters of the original GF novel not covered in GFI and GFII) and then Michael's story in the 60s/70s.

My guess is based on the fact that GFIII is set from 1978-80, which was the time in real life when logically the next GF movie should have been made. I would guess that Puzo and FFC did the rough drafts of the storyline at that time, intending to bring the story of the Corleones right up to the 'present day,' but with the long delay before GFIII was actually made and the loss of Duvall from the cast, a number of changes had to be made.