I definitely assumed the EP wouldn't have much to do with the album, because it's completely its own concept: four little tracks, Song For Sorrow. If the rest of the album was of the same theme, what's the point?
I love these songs, but yeah, I dont expect to see Lady Jane and Lonely Alcoholic on the album. I don't know if they were even meant to be sung live. They're just little stories, you know?
EPs are not necessarily meant to always be "tests" for the album, especially when they're in between albums, rather than preceding the debut of an artist. I think that other EP he did before LICM (I'm blanking on the name now) was meant to be more of a preview to LICM than Songs For Sorrow is to this upcoming album.