Dunn has made it known for months that he would like a four-year contract, but sources have indicated that the Nationals will not give Dunn that kind of deal. Washington has a three-year offer on the table, but Dunn and his agent, Greg Genske, have yet to respond to the offer.
A source close to Dunn indicated that it's less than 50 percent that the left-handed-hitting slugger will return to the nation's capital.
Baseball people in the Nationals' organization are split on whether to give Dunn an extension. Some are saying he is worth signing because of the offense he brings to the table, while others focus on his below-average defense and his high amount of strikeouts (199 last season).
Dunn is coming off one of his best seasons at the plate, however, hitting .260 with 38 home runs and 103 RBIs.
With Dunn not expected to be back, the Nats will try to get a first baseman via free agency or trade. It has been well documented that Carlos Pena, another free agent, is on top of their wish list. Pena is considered a much better defensive first baseman than Dunn, but he is coming off one of his worst seasons, hitting just .196.
The club believes Pena could be someone to lead young players like shortstop Ian Desmond and Danny Espinosa.
From a trade standpoint, the Nationals could inquire about Dodgers first baseman James Loney, who hit .267 with 10 home runs and 88 RBIs last season.
The Nats could even consider Chris Marrero, their first-round selection in the 2006 First-Year Player Draft, at first base. While no one has questioned his hitting -- .281 with 69 home runs and 300 RBIs during his professional career -- Marrero has had problems with the glove and tallied 46 errors at first base.
Bill Ladson is a reporter for MLB.com and writes an MLBlog, All Nats All the time. He also could be found on Twitter @WashingNats. This story was not subject to the approval of Major League Baseball or its clubs.