That would be much worse if it's in fact true, to have a puppet as head coach and the stubborn one being the general manager... maybe there's some truth in all that but I find it hard to believe it's just as you describe.
In the meantime, I do believe the QB competition should be actually for the #2 QB between Lynch and Sloter, because Trevor vs Paxton right now is not even fair. This way not only you give a much needed wake up call to Lynch, but also protect him from being embarrassed when compared with a starter NFL QB (even an average one). It's obvious the guy is not going to be ready anytime soon. 
As for Elway, I think he has proven to be very good at his job, and accepting ones mistakes and knowing when to move on from them comes with John's territory.