How's this plan -- at the very least (again, over the cap and no picks) regardless of what we wind up doing with Melo, Chandler, etc., make an effort to get a little younger, more athletic and up the overall talent level. It can be done on the cheap:
(1) Open up roster spots by removing the following players however possible:
Lamar Odom - either he's part of a trade or he gets cut. Too old and too troubled now to matter anymore.
Ray Felton
Pablo Prigioni
Jeremy Tyler
Tier 1 FA (what the Knicks would consider upper tier with very little cap room):
(2) Sign either Patty Mills or Darren Collison. Would love to add both but wouldn't want to lowball both and get neither.
(3) Resign Cole Aldrich.
Tier 2 FA:
(4) Consider signing the following guys to 2-3 year deals:
6'11" C Marcus Cousin
6'10" C/PF Daniel Orton
6'8" PF Richard Howell
6'8" SF Devin Ebanks
6'8" SG/SF DeQuan Jones
6'6" SG/SF Terrence Williams
6'3" PG/SG Seth Curry
(5) Shop Hardaway Jr. Don't know if N.O. would be interested in him (they have a lot of guards) but I'm VERY INTERESTED in a few of the Hornets young/cost-effective players. Not so much interested in Tyreke Evans anymore, but I'd work whatever lower assets we have available for the following players:
Jeff Withey or Alexis Ajinca
Luke Babbitt
Pierre Jackson
If Shumpert and/or THJ wind up getting traded, Terrence Williams would be my replacement for another big SG -- very underrated with good ball-handling/passing/scoring/defensive/rebounding skills, skills that would serve him well in the triangle system. Dude's too talented not to be playing in the NBA.
If Melo stays, incorporate these players around him. If he leaves it'll really be a transition year -- give the above players ample PT and firmly establish them for subsequent years. See who rises to the top. There could be quite a few jewels here. When cap room opens up the following year (or the year after), add a star or two to a (hopefully) potent, already-established young mix.