It's probably not realistic, but here is my three-step plan for retooling...
1) Perk, Sheed, and 3 million to NOH for Okafor (or, alternatively, GS and Biedrins).
NOH uses the 3 million to buyout Perk, saving them 10 million instantly when including Sheed’s contract. Perk makes up the rest of next year’s salary on a one year vet-minimum deal with the C’s. He’ll be in rehab during the mandatory 30-day wait to return (so no big deal), and he will be in the same position to negotiate a new contract at the end of next season.
2) S&T Pierce and Allen (what ever picks/unsigned players/cash to make it work) to Denver for Melo and JR Smith.
Denver gives up the best player (at this point in their careers), but gets rid of headaches while fielding a team at least as good it would have been with Melo and Smith (Billups, Allen, Pierce, K-Mart, and Nene is no joke). PP and RA get nice contracts and still end up in a winning situation with a chance to get to the finals.
3) Re-sign Nate and Tony. See if you can get Mike Miller or T-Mac for the MLE. Then round out the roster with a center (signed at vet minimum) to man the backup until Perk can return.
2010/11 Roster:
PG: RR, NR, AB
SG: JRS, TA
SF: CA, (MM/T-Mac)
PF: KG, GD, LH
C: (EO/AB), KP, VET-min