UPDATE, 3:04--  The plot thickens: Foxsports.com has added that the Phils are in talks regading a potential three-team deal that would send lefthander Cliff Lee to an unnamed club.  This makes sense for a number of reasons:

--Lee is owed $9 million next year, and the Phils need to clear payroll to sign Halladay.

--Lee will be a free agent after this season, and if he tests the open market the Phils would find it difficult to re-sign him, given their already robust payroll.

--Acquiring Lee may net the Phils some of the prospects requried to complete a deal, without having to give up players like pitcher J.A. Happ and Kyle Drabek, outfielders Domonic Brown, Michael Taylor and Anthony Gose.

UPDATE, 5:03pm

Cliff Lee's agent, Darek Brauneker, says he has not heard anything from the Phillies, Blue Jays, Mariners or anyone else today.

Multiple reports--SI.com, I believe, was the first to confirm it--have Halladay and Lee involved in a three-way that would send Lee to Seattle. A bunch of other names are surfaced, but reports are conflicting--some have Domonic Brown going to Toronto, while others have it as Michael Taylor.  Pitcher Phillippe Aumont would reportedly be going to Toronto from Seattle.  It should be noted that none of this is confirmed.  We know that both the Jays and Phils liked Brown more than Taylor in July.

Brauneker has spoken with Lee today.  "He is obviously aware of the situation,' Braunker said.  "There must be something to it."

Brauneker, understandably, treaded carefully when asked if Lee was disappointed.  "He certainly enjoys being in Philadelphia.  There was not much for him not to enjoy."

The Phils and Lee engaged in preliminary talks about a contract extension last week.   "We had a positive dialogue," the agent said.  "All of the dialogue has been very positive on both sides."