The thing that popped into my head while reading the piece is that sparing one star developer might be pretty cheap; how about putting him on a Skunkworks rewrite for 6 months and see how it goes? If it's looking good, give him whatever resources are necessary to finish. Do you think that would work?
I think that's a good way to minimize risk, but also consider the morale issue. This would be the equivalent of giving one developer a corner, window office while the rest stay in thei cubes.
Perhaps you could apply google's 20% rule? Every Friday the entire staff breaks up into teams and work on skunkworks rewrite projects. I think this will boost overall morale and you might find your developers staying late on Friday nights :)
