Is it considered bad etiquette to ask to read a manuscript in preparation that appears in the citations of a paper? (It was cited in a paper from 2001 - I am not sure it has been published; I cannot find it - although the title may have changed...?)
No, it's not bad etiquette. Most people will be happy to know that someone wants to read their work. Of course, you should take the time to try to find it yourself first. It may have been published under another title or in a hard-to-find place (like some conference proceedings).
From the comments, it seems that you're worried about hurting the author's feelings by reminding them of a paper rejection. I don't think you should feel that way. Rejected papers are part of a normal academic career, and in any case you don't know whether that paper was rejected.
If you ask me for a copy of a paper that happens to have been rejected, I'll send it to you.