A good FFVIII-2 sequel would have to rely on the Rinoa=Ultimecia theory.
Here is an idea:
A new cast of characters, SeeDs or anti-sorceress soldiers or whatever. Threatened by Rinoa's power, or possible power another war starts. Blah, blah, blah, just like the past FF8 storyline, minus the romance.
The cast of FF8 (Rinoa, Squall, Zell, Quistis, Irvine and Selphie) are the enemies, defending their friend from the soldiers, one by one they are defeated and Squall (the final boss), dies in battle. The game ends with Rinoa's anger and an FMV showing her conjur up the magic within her, wanting to return to the moment she met Squall, to defend him and herself from the hell that is today, blah blah blah and whatnot.
A normal plot but it actually works. It's not impossible.