Two things.
I would say "see ya" to Pettitte and give a young pitcher like Hughes a chance. I know he bombed last season, but he's only 22, his fastball was in the mid-90s when he came back in September, and he is still cheap compared to what Pettitte would be making. Pettitte was terrible in August and September and his best years are behind him. Hughes's best years are ahead of him.
Second, I would have found a real centerfielder. Melky isn't going to cut it. Melky doesn't hit with power, and his speed isn't great. I still think he can be a decent hitter, around .280 or higher, but without HR and base stealing ability, his best chance at a long career would be a fourth outfielder on an NL team, where he would play much more. I'm not sure Mike Cameron would have been a good fit, but there sure has to be better players out there than Melky, or Gardner. Who knows, if Gardner can hit .270 he will steal 60 bases.