If the Indians do manage to keep Kevin Millwood, then this issue is probably irrelevant. If the Indians don't sign Millwood, then they think about bring Elarton back.
Scott Elarton was drafted by the Houston Astros in the first round of the 1994 draft (25th overall). He made Baseball America's Top 100 Prospect List in 1995 (63), 1996 (77) and 1998 (28). He reached the majors in June of 1998, and pitched mostly out of the bullpen during Houston's division run that season.
In 1999, Elarton split time between the bullpen and the rotation (15 starts), posting a 3.48 ERA in 124 innings. In 2000, Elarton won 17 games but posted a 4.81 ERA. Probably one major reason for the ERA inflation was the Astros' move from the pitcher-friendly Astrodome to the hitter-friendly Enron Field (now known as Minute Maid Park). Elarton had always been a flyball pitcher, but now those flyballs to left field were leaving the park.
In 2001, Elarton was the Astros' Opening Day starter. Things went downhill from there, though. By the time he was dealt to Colorado in late July, he had a 7.14 ERA, and was beginning to have some arm problems. He spent most of the rest of the season on the Disabled List with right elbow tendonitis.
Elarton didn't pitch again for the Rockies until 2003; he underwent arthroscopic shoulder surgery in March of 2002 to repair a tear in his labrum. Elarton spent most of 2003 in AAA, only pitching 51.2 innings with the Rockies. Moving from Houston's hitter-friendly park to Coors Field was like going from the frying pan to the fire for Elarton; he gave up 21 home runs in 93 IP between 2003 and 2004.
The Rockies released Elarton in late May of 2004, and for good reason; Elarton had an ERA of 9.80 at the time. The Indians needed another starter, so they signed Elarton to a minor-league deal and sent him to Buffalo for three starts. He was recalled to Cleveland on June 12th and struggled initially, not winning a start until July 28th. After the All-Star Break, Elarton posted an ERA of 4.12, a vast improvement over his Pre-ASB ERA of 8.33. After the season, Elarton was eligible for free agency, but elected to stay with the Indians for $900,000.
In 2005, Elarton struggled out of the gate yet again (8.05 ERA in April) but for the most part pitched much better after that. He finished the season with 4.61 ERA, his lowest since 1999.
Although Elarton's not exactly a prime target, the lack of free agent pitching may have some teams interested in him as a 4th/5th starter. If someone offers him more than 2 years/$6M, I'll be shocked.
If the Indians lose out on Millwood, they'll probably go after another free agent pitcher even if they do bring back Elarton. If they sign Millwood, they should be willing to give Elarton's spot in the rotation to one of their younger pitchers, probably Jason Davis, Fausto Carmona, or someone else.
Elarton has a history of arm injuries, and paired with his recent track record, teams will probably shy away from a multi-year contract. Elarton needs good outfield defense and a spacious outfield behind him, so teams with bandboxes or statues in the outfield should stay far away from him.
Of course, I'm writing this before the free agent madness gets underway, when insane offers to starting pitchers seem to the rule, not the exception. So while I think Elarton isn't worth anything more than $2-3M a year, some other team might. If the bidding gets any higher than that, the Indians should just walk away and find somebody else.