7:38pm: The Rays are interested in Balfour, ESPN's Jim Bowden tweets. The Rays are on the lookout for a closer, and as noted below, a doctor for the Rays believes Balfour should have passed his physical, so the pairing of the two makes sense.
5:02pm: Balfour will discuss a grievance with the players' union, according to Ken Rosenthal of FOX Sports (on Twitter). In a full column, Rosenthal reports that he spoke with two doctors who know Balfour well, both of whom say he is 100 percent fine. Rays team physician Koco Eaton was surprised that the deal wasn't completed. Eaton examined Balfour today and said it should have been "a no-brainer" for the Orioles to complete the contract, adding that Balfour's shoulder MRI today looked identical to the one he saw three years ago.
Rosenthal also spoke with Reds physician Timothy Kremcheck, who performed elbow and shoulder surgery on Balfour in the past. Said Kremcheck: "For a guy in his 30s who has pitched six or seven years since his rotator-cuff repair, his MRI on his shoulder looks remarkably good."
Balfour's agent, Seth Levinson, released a statement on the issue, stating plainly that "The only reasonable conclusion is that Grant is healthy and the Orioles at the last moment changed their minds." Levinson's full statement can be seen on Twitter, via ESPN's Jerry Crasnick.
4:13pm: Balfour spoke with Susan Slusser of the San Francisco Chronicle and told her that he is baffled that the Orioles backed off because he is "100 percent fine." He went on to tell Slusser that his MRIs -- including the MRI taken of his right shoulder -- look exactly the same as they did three years ago. Slusser quotes Balfour:
"I'm the All-Star pitcher I was last season. My shoulder is fine, everything is fine. I'm ready to come out there in the ninth inning, do what I do."
Balfour told Slusser that he isn't looking to bad-mouth anyone and made no negative comments about the Orioles. Slusser notes that a team stepping away from Balfour due to medical concerns could cost him millions of dollars (All links to Slusser's Twitter).
2:08pm: The Orioles will not sign Grant Balfour, executive vice president Dan Duquette told reporters, including Roch Kubatko of MASNsports.com (Twitter link). The Baltimore Sun's Dan Connolly quotes Duquette (via Twitter) as saying: "We would never say never or close the door, but we're going to turn our attention elsewhere." Duquette said the Orioles could look to sign another free agent, trade for a closer or stay in-house for the closer, but they're not done adding pitching or other pieces (also via Connolly).
The Orioles agreed to terms with Balfour on a two-year, $15MM contract earlier this week, but problems with the physical placed the contract in jeopardy. With him out of the picture, the Orioles have reportedly begun to focus on Fernando Rodney, with whom they should be plenty familiar following two excellent season with the division rival Rays.