I also agree that a two year deal seems reasonable, as he should have that much left in the tank. If we somehow are able to sign Dwight Howard (or another deserving max contract guy), then he will have to settle for the MLE. If not, and we can only re-tool, maybe he gets 8 mill a year or so. He wants to win as much as anybody, so he would be willing to take a slight paycut.
Perhaps somebody can verify this, but I'm nearly certain that if we get Dwight Howard, we almost certainly can ONLY offer Ray and KG minimum contracts to come back or very close to it.
We will first need to renounce their Bird Rights in order to free up the cap space to sign Howard. With cap holds, rookies, additional signings this offseason, etc. signing Howard will almost take us up to the cap limit.
Most importantly, if we go under the cap in order to sign Howard, we no longer have the MLE available to us. The MLE is only available for teams who start the offseason over the cap (or within the MLE of the cap).
So all we can offer KG and Ray in '12 are whatever cap space we have left or minimum contracts after we renounce their Bird Rights.