To clarify -- ESPN reports that New York "would need a 3rd team" to take Kevin Love. It's not clear how actively this is happening.
There were rumors of Carmelo to Cleveland, and Carmelo just waived his no-trade clause if his destination is Cleveland or Houston. New York does want to trade him to one of those destinations, but they want something meaningful in return. This is why they refused to buy Carmelo out.
If the Jazz step in and offer Favors and a pick to New York, plus something to Cleveland, I think they could make the deal happen. It could mean sending Favors to NY and Hood to Cleveland, but Cleveland can't take much salary. They're way over the cap. The Jazz could possibly include Diaw's deal and take something small back from either team. Jazz will be over the luxury tax and will need to dump Burks by the trade deadline.