Peter Luukko had mixed feelings yesterday afternoon. For the second time since 2004, the Flyers lost in the Eastern Conference finals, falling to Pittsburgh in five games.

"You're still feeling the pain of the loss," the Flyers' president said. "You want to compete for the ultimate prize, but then the reality sets in. It was a satisfying season for the organization. At the end of the day, it still hurts. You don't want to watch another hockey game because you feel you could be there. But wow, what a great season."

Luukko and general manager Paul Holmgren talked briefly yesterday about setting up a meeting to discuss in depth what changes need to be made.

Foremost, the Flyers need more speed on the blue line, even allowing that Ryan Parent will likely be part of the starting six next season.

"From our standpoint, we've got to be a little quicker on the back end," Luukko said. "It's up to Paul [Holmgren] what he wants to do. I think that is a priority and how Paul feels we should fill in. We feel our young players are going to get better, and we don't want to overthink this, either."

Some critical decisions have to be made. Team captain Jason Smith, a defenseman who will need shoulder surgery, will likely sign somewhere else in free agency. His grit and pain tolerance were unquestionable. But much like the case with Derian Hatcher, his mobility was a huge concern.

Hatcher's right knee and his other injuries limited the defenseman to 44 games this season. It's possible his knee is now a full-time medical issue that could prevent him from playing.

The Flyers are tight under the cap and would likely welcome the chance to use Hatcher's $3.5 million salary toward signing a free agent - Mark Streit, Brian Campbell or John-Michael Liles - if Hatcher can't play because of injury. Hatcher, however, wants to play out his final year. He could also be bought out.

"Hatcher was an amazing guy, what he put himself through to play this year. But he was banged up," Luukko said.

Hatcher can still be an effective player, but not playing half a season for that kind of money.

The Flyers have six restricted free agents, three of whom - Jeff Carter, R.J. Umberger and Randy Jones - are going to get nice raises. It's possible that Carter and Umberger could get Group II offer sheets from other teams. That's why the Flyers want them signed before July 1.

"We began looking today at the options we have," Luukko said. "Where do we go with our cap money, and what do we do with trades and re-signings, etc.? In many cases, it is combinations. When you have draft picks, cap room and players, you have options for trades and free agency signings and such. You can create options as you see fit if you are creative."

Carter, whose game rose to new heights and continued to soar in the playoffs, is likely to get a deal worth at least $5 million a season.

"Paul is going to sit down with players and agents to talk about their future and see what possibilities are there," Luukko said.

Luukko said the organization expected gradual progress from some players, such as Umberger, but their progress was rapid.

"All along, we wanted to build the team back as quickly as possible," Luukko said. "It grew leaps and bounds. The lesson we learned was to be successful today, you need that mixture of veterans and youth. . . . [Mike] Richards, Carter, Jones, Umberger, they all stepped their games up. Our young players progressed rapidly."

The management was especially pleased that Kimmo Timonen, a free agent signed last summer, acted as a calming influence on and off the ice with the defense. The Flyers have not had that kind of player since Eric Desjardins retired in 2006.

In Game 5 against Pittsburgh, Timonen was paired with the 21-year-old Parent, who performed well under pressure in three games.

"There is a silver lining here," Luukko said. "Yes, we lost to Pittsburgh. But here was a young man [Parent] who got a chance to play very meaningful minutes and games. That will be tremendous experience for him going into training camp."

The downside to the Flyers' run this spring is that it doesn't leave them much room to grow. If they don't go as far as the conference finals next season, it will be a step backward. If they return to the conference finals but don't advance to the Stanley Cup Finals, it could be viewed as no progress.

"We like that pressure as an organization," Luukko said. "Why not? Let's win it. Ed Snider has always shot for a team that can win it all."

Contact staff writer Tim Panaccio at 215-854-2847 or tpanaccio@phillynews.com.