The Yanks have a problem in the OF. Damon is on a hobbled foot, Sheffield and Matsui could miss the remainder of the season. I doubt they are going to give up Melky Cabrera in a deal. They honestly need him this year. I could see them giving up Hughes and a couple more prospects for Griffey.
As far as asking for a kings ransom, I don't think the Reds are in that good of a situation to demand a return. Sure they can ask for it, but I'm not sure they are in a position to demand it. Other teams (most noteworthy, the Phillies) have players to offer as well in Abreu and Burrell. Both of those players, IMO, are better players than Griffey right now, whether it be because of age, healthy, skills, or salary or a combination of those 4. There are also other teams that would be willing to part with a lesser OF to "plug a 1 year need" for the Yankees, which would lessen the package the Yankees had to give up. That might be a better option for them since Matsui and Sheffield should be back at full strength next year. If you can sell the Yankees on the fact that Bernie Williams will not be their DH next year and Jason Giambi will be their 1B next year, so they could move Griffey to DH after this year, then maybe you have something better than Burrell or Abreu. I'm just not so sure they'd bite on that for the salary involved.