5:16pm: Jon Daniels tells T.R. Sullivan of MLB.com that "there is no truth" to the Oswalt speculation.
4:36pm: ESPN's Buster Olney hears from a highly placed source that there's nothing to the Oswalt to Texas rumors (Twitter links). He adds the it doesn't make sense for them to pursue the highest paid starting pitcher on the market not just given their financial situation, but also when the market is flush with starters.
4:01pm: A source tells NBCSports.com's Craig Calcattera that the Astros and Rangers are "getting close" to having a Roy Oswalt deal in place. It's not clear who Houston would receive in the deal, but the package of players is more or less agreed too.
However, Texas' financial situation is the sticking point, as the Rangers are trying to convince MLB to allow them to take on the roughly $27MM left on Oswalt's deal. MLB currently has a line of credit to cover expenses out to the Rangers, who are in bankruptcy. As Calcattera explains, it's unclear if the bankruptcy court must approve any new obligations.
The 32-year-old Oswalt has indicated that he will waive his no-trade clause to go to a contender, and the Rangers are currently a half-game up in the AL West. He's posted a 3.16 ERA with 8.6 K/9 this year, his highest mark since his rookie season. The $27MM left on his deal is broken down into $9M for the remainder of this season, $16M next year, and a $2MM buyout of his $16MM option for 2012.
The Rangers' team ERA is middle of the pack at 4.12, but their starters have thrown just 362.1 innings, among the lowest in the league. Oswalt has fired off six straight years of at least 30 starts and 181.1 innings, so he'd fit comfortably at the top of their rotation.