Now that the Wizards have won the lottery and the right to pick Wall, they are going to want to dump Arenas. The Nuggets should trade Kenyon and maybe JR or a draft pick for Arenas and either Blatche (best case) or more likely McGee. A risky move, but the potential for a great reward.
We've got to do something and the chances that we get someone like Bosh are, frankly, nill. Someone like Arenas in this situation is the only realistic chance of landing a superstar in Denver outside of the draft (which we generally don't participate in, see no draft picks this year). Free agents aren't coming to Denver unless we are overpaying for borderline star talent (see Kenyon Martin), so cap space is worthless. I know we could use a big man more than another wing guy, but there just aren't any big men available for what we'd be willing to give up. I think I do this trade and put Billups, Arenas, and Melo on the wings with the Birdman and Nene.