Source: Alan Hahn
Credit: Tommy Dee, Alan Hahn, The Knicks Blog (which got it from Hahns 3.99 blog that is just so FRIGGIN special on Newsday.)

The perspective from the Knicks is that their best play would be to go after Carmelo as a free agent, so they wouldn’t have to weaken their roster by trading away players. But Carmelo and his people are worried — with good reason — that the same money available to him now under the current agreement won’t be there when he does become a free agent under the new agreement. The only thing that could save him is if the league offered a concession that grandfathered 2011 free agents under the old deal….
Denver would prefer to send him to a team that can offer the most value for him, but, of course, Carmelo does have some say on his next destination because, of course, he would have to agree to an extension, first.
So the question that he entered the summer with remains: what’s more important to him: the security of a max extension or the appeal of a desired big-market address? He has a season to figure that out.

Based on information I’ve received it would seem that Melo would like to be dealt but I think it’s obvious he knows that a deal won’t happen anytime soon. Here in lies the standoff as we’ve talked about a million times. If Denver feels that Melo will test free agent waters, then they will have to settle on a trade. Melo would likely rather have a deal in place before this summer.
Bottom line at this point, as Alan states, there doesn’t seem to be a rush from Denver’s perspective or NY’s in the Melo situation.