4)Keep Reina, Agger, Skrtel, Arbeloa, Gerrard, Xabi, Mascherano, Lucas, Crouch, Torres - Bin the rest, blood some players from the academy- and start again in the summer. Easier said than done i know

I agree, it seems that another clear out is necessary even though i thought last years clear out would have been sufficient enough to at least challenge for the league title for the whole season. Would you get rid of babel? He hasnt been the best imo but the raw ability is plain to see for me. I really dont think our system suits him because we play him as a wide midfielder which he doesnt look too comfortable in. If he can improve his finishing (he appears to sacrifice accurate finishing for powerful shots), then i dont see the harm in playing him as a striker.
Xabi needs to step up. He still shows that he's a quality player, but i feel consistancy is an issue.

There are some promising youngsters in the academy. The ones which i feel are good enough to warrant an opportunity are insua (left back), jack hobbs (quality centre half for a 19 year old) and nemeth (a natural finisher imo 7 goals in 7 games).