4:31pm: Kevin Baxter of the LA Times quotes a Dodgers executive saying there is "less than zero truth" to the rumors regarding the trade.
4:26pm: Rosenthal now says that both clubs have "strongly denied" the previous reports that the teams were in serious talks about Martinez and Lee.
Rosenthal says the clubs are talking, but the question now, becomes: about what? The Dodgers have had interest in Lee, but including Martinez is a new development, if it's true.
The names in previous reports have surfaced in talks, but club officials say that trade is not currently in the works.
3:50pm: Rosenthal now suggests that the young starter could indeed be one of Billingsley or Kershaw:
"Lee would replace either left-hander Clayton Kershaw or right-hander Chad Billingsley — it is not known which the Dodgers would part with in the package — giving manager Joe Torre the more experienced starter that he covets."
3:21pm: According to Ken Rosenthal, the Dodgers and Indians are in serious discussions about a trade that would send both Cliff Lee and Victor Martinez to Los Angeles in exchange for James Loney, a young starting pitcher, and prospects.
The deal still faces significant obstacles due to the caliber of players involved, but the Dodgers clearly want to strengthen themselves for a strong postseason showing.
Rosenthal names Class AA third baseman Josh Bell, Class AA outfielder Andrew Lambo, Class AAA starter Scott Elbert and Class AAA right-hander Josh Lindblom as prospects who are being discussed. All of the prospects are in the Dodgers' Top 10, according to Baseball America, with Lambo coming into the season as the Dodgers' top prospect.
It's unknown if the Dodgers would part with Chad Billingsley or Clayton Kershaw in a deal to acquire the Indians' superstars.