Jon Heyman tweets that the Yankees and Indians are now discussing the possibility of trading A.J. Burnett for Travis Hafner. Hafner is overpaid and the Yankees need a DH, so that would make sense for the Yankees. So far, though, the Indians aren't too excited about the idea:
Yankees/indians talk revolves around aj and travis hafner. cleve unsure it would do that swap. yanks also don't mind the FA DH options
Hafner will make $13 million in 2012, plus a $2.75 million buyout after the season ends. He's also a popular player in Cleveland, so it may be tough for the Yankees to get much traction here. Hafner still hits well, although he's much less durable than Burnett, and Burnett is much better than most fans think he is. The Yankees may be better off dealing Burnett to the Pirates and finding a DH elsewhere, and that's probably still the most likely scenario.
UPDATE: Tim retweeted this from Jordan Bastian of MLB.com:
Confirmed: Indians not currently in talks with Yankees about possible Burnett-Hafner trade. If talks were ever alive, they're dead now.
So there you go.