It would require giving up Monroe but when they signed Josh Smith they created a redundancy. I've done my share of Melo bashing but Detroit has a roster that could hide his deficiencies:
1 Brandon Jennings (offense, athleticism, 3 ability, distribution, drive skills)
2 Player X (preferably: ball defense, 3 ability. Other skills decent enough to keep Ds honest)
3 Carmelo Anthony (offense++, 3 ability, drive skills)
4 Josh Smith (boards, offense, athleticism, occasional 3)
5 Andre Drummond (defense, boards, athleticism)
This potential lineup would cover almost all the bases for me:
Great athleticism at 3, maybe 4 spots.
Offensive firepower with enough 3 pt. threats.
Peak age - All key players except Drummond in their prime.
Good enough defense provided they add a SG who can defend and make up for Jennings and Melo.
Elite Rebounding and rim protection from Smith and Drummond.
They would need a better bench (they do already have Will Bynum signed as a backup PG) but Miami's shown that's not so hard when guys are willing to take a discount to win.
Coaching could be an issue though. Maurice Cheeks? Meh.
To acquire a SG they could package one of their expirings (Jonas Jerebko would probably be involved at 4.5 million) with their 2014 first-rounder and deal it for some ok SG making 6-7 million.
It's not going to happen, but someone like Avery Bradley would be perfect since he plays D and can hit a corner 3. Someone more realistic might be Goran Dragic but he's not really a defense guy. Preferably they keep their mid-level for a backup big or other bench parts.
I think Melo is definitely opting out but there aren't a lot of great options in terms of teams with cap space:
Utah: Talent too young, unsexy location.
Philly: Talent too young, Hinkie likely not interested anyway.
Charlotte: Loser franchise, unsexy location, not enough talent.
Dallas: Not enough talent, Nowitzki too old.
Los Angeles: Talent there too old, will always be "Kobe's team." Gasol would have to take big pay cut to stay, or he could be gone.
The tricky part to this is:
1) Convincing the combustible Dolan to cooperate on a sign-and-trade to an Eastern rival when his star wants to leave. Ask Jeremy Lin about his experience when Dolan feels betrayed.
2) Convincing Monroe to collaborate and go to NYC.
The first task would probably be harder due to the unpredictable Dolan. The young Monroe would be hard to resist though.
The second task would be a little easier because Monroe could get a max extension and get to live in New York City. It's not definite that he's going to be getting a max offer in restricted free agency from another team, so just take billionaire Dolan's money. At age 23 he's not necessarily looking for a contender yet, just to secure his first big deal (this is an assumption on my part).
If there's another logical destination for Melo in a sign-and-trade, let me know. This one seems pretty solid. Of course they could also renounce Monroe outright and sign Melo as a free agent because they would have the cap space. Maybe there's a way to use that option to force the sign-and-trade on New York? I'm not sure how the timing works on renouncing your own RFAs.
The other more sneaky tactic would be to trade Monroe now for an expiring and a first-rounder, with a "wink wink" arrangement that Melo will opt out and sign as a FA. Then you get an extra first rounder to play with. Or, take a risk and do it without a secret agreement. It's not like Melo has a lot of better options.
Imagine the headline: "Dumars atones for Milicic pick and brings Melo to Detroit ten years later"