Traded Peyton Manning and my first (projected 1.1, actually 1.2) for two first round picks (one projected early, one mid; turned out to be 1.1 and 1.3)
Picked up Daryl Richardson off waivers
Traded Daryl Richardson and mid first (actual 1.3) for Marques Colston, Malcolm Floyd
Traded Eddie Royal, my 2nd and my 3rd for Peyton Hillis after he had gotten off to a "slow start"
Traded an early first (turned out to be 1.1) for a late first (turned out to be 1.14) and a still healthy Cedric Benson
The Peyton trade is great but the last 3 trades are where I see people consistently go wrong rebuilding. If you know you're going to be bad, just accept it and focus on the following year. You would have had the 1.1, 1.3, 1.14, a 2nd, a 3rd and Richardson instead of Colston, Floyd, Hillis and Benson.
I really disagree with that. The biggest mistake I think people make when rebuilding is that they put all their eggs in the draft basket, then have to pray that their guys stay healthy and are still good by the time they acquire some other starters to go with them.
As long as your league has active traders, I think the right move is to trade one guy for three, trade down from your likely 1.1 and try to get more capital, then keep flipping. Sure, Benson was a bad fit for my team, and I never got to flip him. And that trade really hurt, because I gave up 1.1 for 1.14 to get a guy who ended up getting hurt a week later. Oh well. That's the cost of doing business in the flipping game.
If I'd gone the way you suggested, I wouldn't have gotten McGahee, because he was a bad fit for my team. But I flipped him for a first, which I used to acquire Percy Harvin. And I got him as part of a deal that netted me Chris Johnson, and the guy I traded for Rivers, and the guy I traded for Finley and Lance Moore. (You might not love those players - and that's why they were available to begin with - but I'm getting great offers for them now, which means I can still flip them for something else I want if I'm so inclined.)
You might also say that I should have had 1.1 and 1.3, and that I should be able to trade those picks for more than I got after all my trades. But that was a big gamble. Neither of those teams was expected to end up 1.1. I was. And I would have had it, too, if I hadn't been so active in the trade market. So maybe I end up with 1.2 and 1.3, and now I end up taking Montee Ball - who I got anyway - and maybe Bell or Lacy. And then I pray that those guys stay healthy long enough for me to make a run. Four years later, I've paid four entry fees for a high risk rebuild and a three or four year window to try to make some money back. No thanks.
Similarly, I flipped Colston for jacquizz Rodgers and a 2014 first, and traded that 2014 first a 2014 second to get Montee Ball, who I would have taken at 1.3 (or at 1.1, honestly - I'm very high on him). So while that trade was another one that looks worse once we know how the picks lay out, I basically traded Richardson and a 2014 second for Jacquizz and Floyd. I'm not even sure that's a mistake, since I have SJax to go with Jacquizz, and I don't have any interest in Richardson.
If you're not going to be as active flipping players - or if your leaguemates aren't frequent traders - then I totally agree. But I think people make a huge mistake when they rebuild by sitting on their butts, hoping their picks work out, and paying entry fee after entry fee waiting for that big 2016 season they hope to have. I took over a crappy team, I put all my eggs into one basket and the guy got hurt, and then I changed my whole outlook on this thing. Now my goal is to compete every year, and if I can't compete, to use my early waiver position and the perception that my draft picks are worth more to make as many deals as possible to rebuild as quickly as possible and compete the next year. YMMV.