4:58pm: The Raptors are "highly unlikely" to sign Chandler this week, tweets Ryan Wolstat of the Toronto Sun. If Chandler is a restricted free agent again this summer, Toronto could get involved, but would probably need his asking price to come down (Twitter link).
Restricted free agents aren't eligible to sign offer sheets as of March 1st, so Chandler will have just two days to try to secure an offer from a team besides the Nuggets. Denver would then have three days to match any offer.
If Chandler doesn't sign an offer sheet before Thursday, he could either sign with the Nuggets or sit out the season and become a restricted free agent again in the summer, when more teams could have interest (and money). A rest-of-season contract with the Nuggets would allow Chandler to become an unrestricted free agent this summer, but Denver has indicated it doesn't plan to negotiate such a deal.
The Raptors appear to have interest in Chandler, but only have about $4.3MM in cap space, so the Nuggets wouldn't have much trouble matching any offer Toronto made. Yesterday, we heard Chandler and Luchey were in contact with an Italian team about the possibility of a rest-of-season deal.