Regarding this question.
I had a similar situation and decided that the action would fail. I think the following exerpt from the Comprehensive rules applies:
From the point when an action is announced legally, to the point after reactions to a particular targeting have taken place, if anything interferes so that the particular required targeting can no longer be met (including reactions to the targeting itself), the action fails. Its effects do not resolve, further targeting does not take place, and its costs are waived. It is still considered taken, but not resolved. If it was on an Action card, the card is discarded normally. [CLARIFIED Feb 5 2008; each piece of targeting is considered separately]
Clearly, the reaction on Kyuden Kyotei and Doji Chitose's reaction following it take place between the legal announcement of the action and "the point after reactions to a particular have taken place" and, assuming that Doji Chitose removes the only legal target from a given battle, "the particular required targeting can no longer be met" and the action fails with all the described consequences.
Is it so?
thanks,