According to Football Italia, who are citing AC Milan's official television channel*, the club and Fernando Torres are €2.5 million apart on completing a deal, widely reported to be a one-year loan move. Milan naturally want the striker, Chelsea's most expensive player, to take a significant pay cut (my guess is that following Italian convention the €2.5 million cited is actually the cut to Torres' net wages) in order to be willing to bring him to the San Siro; Torres equally naturally doesn't want to leave any money on the table.
*And therefore presumably not making this up.
It's unclear how much of a subsidy Chelsea would be willing to pay to hasten Torres towards the exit, if indeed they're willing to contribute any money at all. Ditching the 30-year-old is an exercise in saving money, after all, and since he'll need replacing the margins are pretty slim. But that Milan are apparently willing to pay €5.5 million of Torres' net €8 million per year wages (about 70 percent) is promising, and should they manage to talk him even a little way down from his wage demands Chelsea contributing some money (or indeed Marco van Ginkel) to the cause doesn't seem so implausible.
As to the talk of a loan ... that we're hearing so much about fees and salary figures suggest otherwise to me. But this is a slightly confused situation, and until it's closer to a resolution we won't have a particularly clear picture of what's happening.