People are overlooking the money here. The Reds have the money to make a splash to fix the rotation, but if they start nickel and diming it away on reclamation projects, relievers and iffy players they'll be stuck with in house options and IMO that is simply not good enough. Get the pitcher first.
As far as the bullpen goes, leave Chapman out there and get a good starter to go with Cueto, Leake, Arroyo and Bailey and the bullpen will be fine. Arroyo should be healthy and go deeper into games in 2012. Cueto should be available all year and the team should get more innings from him. Leake is ready for a full 200 inning load now, so he should provide more innings as well. Bailey is still a bit iffy but has teh most talent of the bunch IMO. If they can get a consistent guy who can start 32 times and average about 7 innings, that bullpen should be much improved. The team won't need to use 5 or 6 pitchers every day and the whole lot of them should be better prepared to handle the dog days. Chapman, Bray, Arredondo, Masset, Ondrusek, Lecure and Wood (with Boxberger on the way and lots of reinforcements as 12th pitcher candidates) should provide a deep, well balanced pen who have guys who can give innings, provide heat late in the game and give multiple looks. The only thing this pen needs IMO is to leave Chapman in place and to be paired with a rotation that doesn't put them in a hole 5 times each week.