http://theknickswall.com/2012/07/08/knicks-stand/ this isn't a 100% valid anymore however it will give an outline of what is possible.
ok so the knicks gave all their contracts save for Gadz to the rockets, and will likely sign Kidd to the MLE. This means gadz contract in a sign and trade is worth around 2.1 million left to use on a starting salary. Its not the BAE but considering the talent on the team that might be enough to lure a decent player.
Also while I will admit I thought it was lip service when i heard it I remember reading Grunwald was an expert in ways to manipulate the cap. So far he has given out basically two mini MLE's and has enough for basically a BAE by doing the odd move of signing a big man to a last second contract before the playoffs. I really am about to start saying in Grunnie We trust... except when Dolan is involved.