Since we'll all know what the result will be by Tuesday 11:59pm. Let me try to summarize what happened without putting anyone's emotions in (Lin is pissed cuz Knicks don't want to sign him off the bat. Knicks is pissed because they got played and now will have to be the b*tch if they match the deal and Rockets is pissed because they need this done before they can go after D.Howard).
Please correct me if I'm wrong cuz I really don't know which source is legit anymore (even ESPN is acting like News Daily).

So Lin made a lot of money for the Knicks in the 25 days he played
Lin got injured and Knicks doubt his ability for next season
Woodson and other players went to visit Lin but the GM/president never talked to Lin about his expiring contract
Knicks did not offer Lin anything at all comes July 1st and expect Lin to test the water
Lin got confused and so he tested the water
Houston Rockets came to offer Lin a 4 year deal but the Knicks refuse to take the offer sheet indirectly (Rockets source said so)
Lin never signed that 4 year deal if it ever existed on paper
Knicks put words out via Woodson and other irrelevant figures to guarantee Lin will stay as Knicks, but the Knicks never matched the offer
Lin or SOMEBODY important enough for the Rockets to believe the Knicks will match that 4 year deal offer no questions asked.
Rockets said 'ORly?' and made a 3 year deal officially on paper this time and Lin signed it on July 11th
Knicks is not expected to respond until Tuesday 11:59pm and took out all of Lin's jersey from the online store.

Is that correct so far?

you have the timing of the offer sheets a little off.

Lin was offered 4yr $28M from the Rockets on July 6th. He couldn't officially sign an offer sheet until July 11th when the moratorium lifted. Knicks made it known before the moratorium lifted they would "definitely match" (I think this was a mistake by the Knicks, if they had played it cool, none of the rest would have happened.)

THEN, on July 13th, Lin finally signed an official offer sheet. But he and his agents had negotiated more money, probably using the leverage that the Knicks would DEFINITELY match the original sheet. Knicks were indirectly quoted as saying they'd match up to a billion dollars. So Morey called their bluff and made Lin an offer for the maximum he could possibly offer over 3yrs. The $5M in year 1 and 2 was the most anyone could pay him thanks to the Arenas provision. Year 3 is a max deal for someone at Lin's years of service in the league.

The Knicks were then either not delivered the offer sheet, the Rockets couldn't find Knicks brass or Knicks brass was dodging them all weekend.

Supposedly Grunwald got the sheet on Saturday night, which meant that the clock to match the offer was 3 days and expires on 11:59pm Tuesday.

Though the Knicks are now disputing that timeline. Which to me means they're still trying to calm Dolan down.