The only part of this I'm having trouble getting my mind around at this point is what is reported to be the opening offer of Santana's reps for a contract extension in the range of ~$126M, or "Zito money," as it has been described. The number of years they've asked for is not clear, but even if it's five years that doesn't strike me as much beyond reasonable in this day and age for Santana's kind of talent. If it's six or seven years it approaches no-brainer territory. Such a contract would look more reasonable than the Pujols deal in a couple of years as the Jake Peavys and Brandon Webs of the world hit the open market.
It's also possible that Santana's people know that, reasonable or not, Minnestoa's ownership is unwilling to to pay anything close to that kind of money for anyone as a matter of principle, and have thus made and publicized an essentially phony lowball offer in order to (a) look reasonable; and (b) position his next team to go much higher than that by claiming that $12oMish was only a hometown discount price. Of course, given my recent cluelessness regarding how negotiations work, I may be full of beans about all of this.
All that aside, I think Santana to the Yankees is inevitable, and I think the Twins should and will get a good return for him.