If he was going to retcon it, I could see him still using the Anchuent Prophecy plot, so I'd rectify it by replacing Sarah and Wes, and their transformation trinkets. I'd make it simply that, unbeknownst to Chris, and known only to the old man and Graduon, when Chris recieved the Sonichu Medallion, it created three other medallions to maintain the power balance, and counteract eachother. A Rosechu medallion, a Giovanni medallion and a Robotnik medallion.
An unknown sweetheart-to-be would get the Rosechu medallion, which gives her own Rosechu form comparable to Saramah, but Chris wouldn't meet her for a few episodes. Giovanni's medallion would make his Pokemon stronger, and Robotnik's medallion would increase the strength of his Robot Armada.
Giovanni would want Sonichu for his hybrid Pokemon qualities, and Robotnik would want him as a battery for \M/ETAL Sonichu, which he'd use to crush Sonic. Until Sonichu is captured, \M/ETAL Sonichu would be a pure robot running on Ring power rather than containing Sonichu as a battery.
Eventually, I'd have \M/ETAL Sonichu turn rogue on his creator and steal both the Giovanni medallion and the Robotnik medallion, having the effect of turning him into an Ultra mode, so it creates a nice bit of duality between Sonichu and \M/ETAL Sonichu, and would give them both an Ultra Mode for a final showdown.