I don't think you put Kelly on waivers. Schubert, yes, but not Kelly -- for all kinds of reasons independent of cap hit, salary, etc., etc. You just don't do it to that guy.
My guess is we waive/demote Schubert, and send down Smith, Lee, and Carkner -- for now. That leaves us with 23 players, including an injured Winchester.
When Wincester comes back, tho', we have decisions to make, for sure. And, yeah, it would all centre around moving Kelly. He doesn't fit into our top 9 anymore, and he's not a 4th liner. Good player who just doesn't fit our team's needs anymore.
And in spite of what Spector is saying (surprise, surprise), I don't think Kelly is untradeable. We're not going to get a good return or anything (a 3rd? 4th?), but teams are always looking for steady, reliable players who can PK and play good defensive hockey. To me, the kind of money handed out to guys like Pahlsson, Moen, Madden, etc. in what was a very fiscally conservative spending season proves that. Tell me that Kelly doesn't instantly make a team like, oh, ATL more defensively sound and more effective on the PK. Instantly.