As far as trading them, yes they can be traded, and the funny thing is the fact that they're not on the 40 man gives them some trade value. My suggestion:
1) Pick the most expensive contract you want to unload. Shop him with all boxes checked.
2) If anyone offers a non-40 man player, investigate that deal. They see the player as a positive asset, so maybe they'll throw in some cash that can help cover any salary you can't trade
3) If nobody does, see who offered you a guy making league minimum (or at least less than the guy you're offering). They may not see the player as much of a positive asset, but they're willing to pay his salary to get someone else off their roster. Try and extract salary retention of the player you're getting back, and/or cash.
4) Repeat the process in descending order of contract, throwing in any "free" players the previous deals have netted you if it greases things along to get more cash or salary retained and wipe out the unwanted salaries.
Whatever your "don't fleece the AI" scruples are, it's defensible to abandon them here, since you're just correcting an apparent glitch in the game. Although I guess you could also just correct it in commissioner mode, which literally just occurred to me as I was typing this and would have saved me an hour of screwing around with trades to get rid of them in my game.
