After a period of dormancy following the collapse of a four-team trade late last month between New Jersey, Denver, Utah and Charlotte, the Knicks got back in on the bidding about two weeks ago after Anthony made it known to the Nuggets that he would not budge on his refusal to sign a three-year, $65 million contract extension with Denver.
The offers the Knicks have proposed have always centered around packages including Anthony Randolph, the expiring contract of Eddy Curry and a first-round draft pick they would acquire from a third team, and New York has softened its stance on including forward Danilo Gallinari in a trade.
The most recent obstacle, according to the source, was for the Knicks to use one of those assets, likely Randolph or Gallinari, to acquire a player from a third team that the Nuggets value more highly than either of the Knicks forwards. The source said that obstacle can now be overcome, with the Knicks confident they can get their hands on a player the Nuggets would prefer.
The source also cautioned that the Chicago Bulls remained in the Melo mix, although the contract extension Chicago reached earlier this month with Joakim Noah would preclude him from being included in any deal the Bulls would put together for Anthony.
Also, New Jersey has faded from the Anthony sweepstakes, growing disinclined to include rookie Derrick Favors in a trade, a league source told ESPN.com's J.A. Adande.
There were no concrete indications regarding whether the Nuggets were inclined to deal Anthony prior to the opening of the regular season next week. But the rekindling of trade talks two weeks ago coincided with the Nuggets' hiring of salary-cap specialist Pete D'Alessandro.
The Knicks have had their sights on Anthony since losing out over the summer in their free-agent pursuit of LeBron James, Chris Bosh and Dwyane Wade. They remain determined to add a second max-salary player to their roster to play alongside Amare Stoudemire, who scored 39 points Tuesday night in a victory over New Jersey to overtake Anthony for the league lead in preseason scoring. Stoudemire is averaging 26.0 points per game to Anthony's 23.5.
The Knicks would have to part with an additional asset or two to acquire a first-round draft pick to include in any deal with the Nuggets, and one New York player who has increased his value in recent days is backup point guard Toney Douglas, who had 24 points Tuesday against New Jersey after scoring 23 two nights earlier against Washington.
Gallinari and Randolph have both struggled in the preseason. Gallinari followed up his 0-for-7 performance against the Wizards with a 3-for-7 night against the Nets, while Randolph, averaging 11.0 points and 3.8 rebounds in six preseason games, scored 13 points but did not grab a single rebound. Curry, whose $11.3 million salary comes off the cap at the end of this season, has been sidelined for all six exhibition games with a strained right hamstring.
Chris Sheridan is a senior NBA writer for ESPN.com.