"They" are still talking about it.  Per CBA rules, to flip Dunleavy now and for the next two months, which would now extend past the trading deadline, he has to be traded alone.  He can't be traded with another Pacer as part of a single deal to make the trade work under matching salary restrictions.

Well luckily for the rumor-mongers, his contract is perfect to avoid worrying about this restriction.

Possible matching (not completely rediculous from an outside observers standpoint) salary packages include:
Maggette
Mobley
Cassell
Thomas + Rebraca
Livingston + Rebraca

So on we go.  This rumor may just burn hot until it happens or snow falls in Venice.  Wait...

Nothing was ever written here!