Well, I wouldn't have wasted one of our two-ways on Blevins and would've used the other one on someone like Mason Jones or JaeSean Tate who are both playing decent for Houston right now.
But since I'd be assuming the current situation I'd do this:
Fire Stotts immediately.
Call Jerry Stackhouse and if I liked what he said I'd hire him but that would likely be for next year. Chris Beard, David Vanterpool, Ime Udoka, and Becky Hammon would also get calls for interviews but I guess would be stuck with Tibbets until the end of the season. I'd bring in Earl Watson as lead defensive assistant coach and maybe even make him interim head coach as long as he knew he wasn't guaranteed that position next year.
Next I'd sign Brandon Knight to a vet minimum. Not the greatest option but there are slim pickings for PG's in free agency. Since Nurk isn't getting his bonus we have just enough room to sign someone.
I'd cut Blevins plus it looks like the NBA is about to add a third 2-way spot so I'd try to sign 3 of Jonah Bolden, Omari Spellman, Jaylen Hoard, Zhaire Smith, or Khyri Thomas.
From there just try and tread water until we get our main guys healthy. I think with a better structured offense players like Ant would be more comfortable. With the right tweaks and health later in the season I think we'd be more equipped for playoff success than in previous years.
I've been all about trades in the past but I don't think there are many deals with the pieces I'd inherit to make those worth it.