1) Sign Damon. Heart and soul of your team, you let him go to your rivals for an extra couple million. Idiot move.
2) Not sign Drew. Very few people, even here, liked the deal. I don't remember who was available last year, but hell, even Nixon on a one or two your deal would have been better.
3) Resign Cabrera instead of Lugo. Defense matters more at short than the Moneyball people would make you believe. Any wonder you won when you got rid of Nomar?
In fairness, things I would have done that Theo did...I would have overbid for Matsuzaka, I would have kept Varitek at his inflated salary, I would have signed Okajima, and I would have traded for Gagne.
Even better..moving forward....
1 & 2) Resign Lowell and Schilling. Both of these guys are gamers, both of them want to come back. Similar contracts as they stand now, especially for Lowell, and Schilling on a two year deal seems fine. Schilling can bridge the rotation, and with a core of Beckett, Buchholz, and Lester, you will be in great shape. Schilling is a luxury you can afford. Lowell is a necessity.
3) Let Gagne go. Mistake. Don't compound it.
4) Find a trade partner for Crisp. You will have to eat most of his salary, welcome to the world of Yankee spending. Start Ellsbury in center from day one. Can't do worse than Crisp.