After a long standstill, TLN is reporting that the two parties have begun talks again. It's not clear which side may be budging, but one can assume that it is Nylander's party, as the Leafs just don't have the cap space to make an offer high enough to bring him back to the table.
That is, unless they are looking to create space elsewhere through potential trade, or letting other free agents walk for a lower price. As the situation drags on, though, it will only get messier.