Below are my thoughts on how we should handle the Peavy situation.

If the Padres do not commit to a deal by noon tomorrow we should look at free agency as if Peavy was not on the table.  We should immediately obtain the highest quality pitcher we can get ASAP.  

We should pursue Dempster, Lowe, Burnett, and Sheets, in that order.  We should try to sign Dempster to drive up the price for the Cubs in acquiring Peavy. 

The Cubs could either A) mortgage the farm for Peavy or B) Aggressively pursue the remaining pitching free agents instead of waiting for peavy.  If they get agressive with free agents we should try to close on Peavy quickly and without adding players.  If they don't bite then move on.