My take on things:
(1) Malakhov was depressed by his play this year. In dispair he told Lou that he wanted to retire. Lou accepted. Malakhov left to go to Russia.
(2) Malakhov's agent got wind of what Malakhov did and went into full panic mode. He called Lou and said that the Vlad didn't retire and just wanted to take a leave of absence. Lou refused and said that they had a verbal agreement that Malakhov was retiring.
(3) Given that no papers have been signed, but Malakhov hasn't show up to work, the Devils have no choice but to suspend him to get him off the cap. However, Malakhov can't just come back and say he wants to play. He has breached his contract and Lou will just wait for the papers to arrive rather than void the contract.
I believe from what I've heard that that's exactly what's going on. I feel sorry for him really, to put in 13 years of hockey, have a stanley cup, an olympic gold medal, a world championship, and end your career with a difficult season after you had already decided to retire, and with so many people mocking you? He didn't even play that poorly from the point he was benched, not so poorly to be treated so badly by the Devils, after he probably painfully admits to himself he's done and goes to pack it in?
Really most people when they retire get a nice little send off from their team, he got a very cold farewell. I really don't think he deserved that. From anyone. You can be mad at how much money he was paid but it was the Devil's who offered him that money, as you can read in these articles. His only crime was deciding to accept it, something I doubt a scant few would have passed up. (including all your favorite players I'm sure)