OK I figured I'd give this a second look. If you can trade for picks, there's no reason not to test the market on Davis. It's probably sky-high right now, with all the 35+ HR predictions we keep reading about and stuff. The keeps are still the same though.....I love Markakis, and he's gotten better every season, but I'd still keep the others.
The decision between Davis and Kershaw is tough. I would go with Kershaw, I think players with ace potential is more valuable than a 30HR guy. Especially since you have 3 guys on your team that should get 30+ HR next season.
Pujols, Santana, Braun, and Hamilton are locks. I'm personally a bit skittish on Rollins, but considering the mighty dropoff from Rollins to the next shortstop and Rollins not 100% for a good deal of '08, I'd still keep him.
Kershaw or Davis is really a tough pick. I see Kershaw having a bit of a higher payoff, though I expect some patience here. At best, Kershaw goes on a career arc similar to Chad Billingsley where he really breaks out in two years time. What Davis has shown so far is impressive, especially in hitting for power to all fields, but too early to say if his discipline improves to the point he can be a 40 homerun threat all the way through without being a liability in average (so far, so good though). It's a toss-up, but I'd take Kershaw by a hair, especially focusing more on the long run.
You mentioned you could trade for draft picks. Can you trade a player for a pick, or do you lose picks in the redraft if you get a sixth pick.
I see 9 players that I would consider top 50
Pujols - Keep Santana - Keep Peavy - Trade, he'll almost surely get more W's, but I think everything else takes a a step back. Braun - Keep Rollins - Keep Hamilton - Keep, but makes me nervous Markakis Beltran- Keep Phillips
Very tough decision between Kershaw and Davis. I say Davis only because of what I've seen in early mock drafts. You can get very good pitching late, and gives you some trade options.