The team and its franchise player had talked about the framework of a deal that would pay $175 million over the next seven seasons.
But as of Sunday afternoon, sources say, the Mariners and Hernandez are not close to finishing an extension, because there are issues that the two sides are sorting through.
The elbow issue is perceived by at least one of the parties in the deal as being a possible impediment to the completion of the new contract.
"It's an issue," said one source.
Mariners general manager Jack Zduriencik, however, told MLB.com on Sunday that his ace has been on a normal throwing routine in his preparations for spring training and is expected to report with the Mariners' other pitchers and catchers on Tuesday.
He said Hernandez would undergo his physical exam in Peoria, Ariz., "and we'll get rolling."
"I'm not going to comment on any of that other stuff. It's ridiculous. I've watched him at [Safeco Field] for the last month or so throwing, and he's his normal self," he told MLB.com.
Hernandez has been a workhorse in his career, throwing 1,620 1/3 innings already; in fact, since 1969, only three pitchers have thrown more innings before their 27th birthday, according to Elias Sports Bureau -- Bert Blyleven, Fernando Valenzuela and Dwight Gooden.
But as salaries have skyrocketed over the last 15 years, teams have become increasingly wary of medical concerns.
This winter, for example, the Boston Red Sox blew up a proposed three-year, $39 million deal with Mike Napoli because of a hip condition, and the Cubs killed a deal that would've sent reliever Carlos Marmol to the Angels for Dan Haren, again because of a hip issue.
Hernandez is signed for the next two seasons, so there is time for the two sides to continue to work to a deal; the team wants Hernandez, and he has said he wants to stay in Seattle.
Some teams and players have negotiated medical exceptions into contracts to protect the team against a catastrophic injury. For example, in the extension that CC Sabathia negotiated with the Yankees 16 months ago, language was added to protect the team against a shoulder injury before the end of the deal.