Well here's what I would do, and what is probably most politically feasible:
1) All approved Transit City funding, except that going toward underground portions of Sheppard, gets diverted toward underground parts of the Eglinton LRT. Construction starts ASAP.
2) Underground portions of Sheppard still get built, BUT the design is changed to be subway instead. Construction starts ASAP.
3) All remaining aspects of Transit City are canceled.
4) All pending but not released Transit City funding goes toward building the DRL, as a subway, in the hopefully not too distant future.
The advantages are:
a) TBMs and many LRT vehicles are still purchased and put to use, reducing wasted money and cancellation fees.
b) The LRT tunnels beginning at Don Mills would have represented a permanent roadblock at the east end of the Sheppard subway, but are replaced with subway at almost no change in cost.
c) With the surface component to the Eglinton line gone, souped up LRT consisting of much longer train sets can be used without conflict, and easily accommodate future capacity needs.
d) The silly parts of Transit City that would either need to be replaced with subway rather soon anyway, or are just not needed at all, are canceled.
e) We instantly have money for the DRL!
EDIT: Also, Rob Ford gets his subways, left leaning councilors get to keep most of Transit City, and Rob Ford can ditch the Queen streetcar for subway instead depending on the alignment. Most importantly, all of the funding is approved!