I'm sure Edge will be back with the Colts next season, but if not, then I'd think Indy would trade him over just out-right releasing him. But, then again, I'm not up-to-date on what the cap hit would be via a trade of just released.
Anyways, I think that "IF" Indy makes Peyton chose between the $$$ being frontloaded or keeping Edge that Indy only has themselves to blame.
I say, pay Manning what he's due and work it out with other players. Peyton should not have to chose and Indy should not have waited so long to sign him to an extention either. Manning played out his contract and now should be paid. Yes, he could defer some money to help them with their cap, but just pay him. Besides, Harrison and Edge's contracts are up next season. Are they goin' to also rework their deal to help the Colts or is it just Manning??
IMO: Edge is replaceable is that offense. Rhodes and Williams 2 showed they can be productive. Now, I grant you that Edge is a much better rb then either Rhodes or Williams 2 and that having him make the offense more dangerous then the other two.
But does that mean that losing him the offense will grind to a halt?? Naw. I think that offense will be fine without him, but much better with him.