I put a bunch of stickies on the wall and came up with a single conclusion.

[Conjecture]

Dolan's Brain: We are going after Dwight. We are willing to let go of Lin to do this but would really prefer if we keep both. But just in case we can't keep Lin, we're getting Felton. Felton, JR smith, carmelo, Amare, Dwight lineup will keep us the best team in New York despite the Nets' best efforts.

[/Conjecture]

Here are some of the rumors, mixed in with some facts.

• SpearsNBAYahoo "(Lin) loves the New York fans.He did not see this happening.He sounded surprised on the phone,”Lin's high school Peter Diepenbrock told Y! 7/14/12 11:32 PM

  x

• ESPNSteinLine Jeremy Lin clock did eventually, officially start tonight after all the, uh, delays. NYK have until 11:59 PM TUES to match on Lin. Or pass 7/14/12 10:56 PM

• Mark Haggard, a South Caroline TV News Reporter reported that Felton had told him that Lin was on the outs.x
• Tweets from sources have conflicting reports about whether or not the Knicks will sign Lin. Feigen of the Houston Chronicle has a source that says NY has not given Felton any assurances about Lin being there. Berman of NY has a source that says Lin aint gonna be there. Ken Bergman of CBS (i like him) has his own analysis indicating that NY moves like they aren't thinking of keeping Lin (mirrors my own).
• Rod Boone of Newsday tweeted that Melo said: "It's up to the Knicks FO to match that ridiculous contract" (referring to Lin's 3rd 15 million dollars year)

Obviously, something's happening. If we sieve out all the important data, and the rumored data we get some facts.

1. Grunwald stalled for time. He cleared out his entire front office and delayed the time till tuesday 12:00 pm. A full day. The offer was received Saturday Night instead of Sat. Morning.
2. The Knicks are over the cap. The Knicks are grabbing free agents left and right and are totally unworried about going over the cap. The Knicks are paying the Luxury tax anyways. Lin's a restricted Free agent so not all of his salary is counting against us anyways. What is worrisome is Lin's 3rd year. It would cripple that entire year as Tyson, Amare, Melo, and Lin would really make it expensive for Dolan. I think it's already 70 mill with all of them. As of 2013-14, a team over the apron cannot receive a player in a sign and trade. There are other restrictions.
3. Jason Kidd got arrested for a DUI on Sat. Night, during this whole Lin thing. Take what you will.
4. Felton will be signed for 3-5million dollars a year.

Dolan isn't going to be worried about going over the salary cap to field a team. He's done it before. 2015 is the year to break everything down and he'll do that to avoid the onerous repeater tax but all the other taxes aren't going to faze him. Especially since Lin makes up that money in packing MSG, in cable contract negotiations, as well as Jersey sales.
So in what alternative reality, would giving up Lin make the most sense? Why would you sign Felton as your 3rd PG when any crappy PG with the min would do? Like Pablo Prigioni? Why exactly are we overloading on point guards when the SG position still needs filling?
Okay brace yourself while I run down every fact with wild guesses.
Glen is stalling for as much time as possible because he needs that time to convince the Magic to trade Dwight to him. Up to the last second, he won't give up. The more time he has, the better his chances. The Magic are in no hurry to trade Dwight. If by chance, they do get Dwight, they'll have to take on bad contracts the Magic have. Or not. depends on negotiations.

in Lin's 3rd year, with a full roster complement, the Knicks will be 15 million or so over the tax threshold. they would pay around 30 mill? of taxes. Dolan can pay this. The poison pill is meaningless here.

But even if they do sign Dwight, why not sign Lin as well? it's not like they don't have the money. from what I've read about the CBA, you can only sign free agents or trade for agents without going over 100,000 dollars over the salary cap. Otherwise you need to use exceptions.

I won't bore you with the Exception details but it seems like we need to save our exceptions for Dwight. We just don't have enough money in those exceptions for Lin's 3rd year as well as the possibility of signing Dwight for an extended contract.

So if Magic trades with the Knicks, if the Knicks convinces Dwight to stay, then the exceptions used for Lin's 3rd year needs to go to Dwight. If all this happens, we'll still need a PG. Which makes the rumored 4 year Felton 18 million signing such a credulous rumor.

*I don't think the Magic are going to trade with us if we don't offer Tyson.

Hit me up if I'm guessing this wrong.