OK, I think that this is finally it, they aren’t going to do it and they’ve kicked it over to the rules committee and now the rules committee is between a rock and a hard place. They can’t just flat out ignore the delegates because people are starting to demand their money back but they just can’t give in. I bet they split the difference and do a proportional delegate distribution that won’t effect the outcome at all or they could do as Nelson suggests and cut the delegate count in half. At least Obama and Clinton were both on the ballot so whatever they do, it will at least be fair:

Facing strong opposition, Florida Democrats on Monday abandoned plans to hold a do-over presidential primary with a mail-in vote and threw the delegate dispute into the lap of the national party.
While the decision by Florida Democrats left the state’s 210 delegates in limbo, Democrats in Michigan moved closer to holding another contest on June 3. Legislative leaders reviewed a measure Monday that would set up a privately funded, state-administered do-over primary, The Associated Press learned.
[…]
“A party-run primary or caucus has been ruled out, and it’s simply not possible for the state to hold another election, even if the party were to pay for it,” Ms. Thurman said. “.. This doesn’t mean that Democrats are giving up on Florida voters. It means that a solution will have to come from the DNC Rules & Bylaws Committee, which is scheduled to meet again in April.”
[…]
Florida Democratic Sen. Bill Nelson, who backs Sen. Clinton, has suggested one option — seating all Florida delegates already chosen but only giving them half a vote each. Sen. Nelson discussed this idea with Sens. Clinton and Obama on the Senate floor last week.

Based on the Jan. 29 results, Sen. Clinton would have won 105, Sen. Obama 67 and John Edwards 13. Instead they would get half those delegate votes.
Republicans stripped Florida and Michigan of half their delegates as a penalty for early primaries.

Since Michigan is getting its redo something has to be done about Florida or the Democrats are going to have an even bigger problem on their hands. And saying that they knew this was going to happen when they moved their primary and that the DNC should stick to the rules, doesn’t really address the politically charged situation they are now facing.