I think an express Blue Line from Charles to Kenmore would be worthwhile in and of itself. Would relieve the Boylston Street Subway and provide a rapid link between Downtown and the Fenway area. Just because we can't figure out where it should go after Kenmore doesn't mean we should oppose a Kenmore extension itself.
(Also, it seems more manageable to treat a Charles-Kenmore expansion as a second phase of a long-term project; leave the Kenmore-west stuff for phase three.)
My personal preference, though, is to extend the Blue Line under Brookline Avenue down to Riverway or Brookline Village to meet the Green Line, with an intermediate stop at Longwood Avenue. Divert the D over Huntington Avenue, swallowing up the E. The existing Highland Line between Brookline Village and Kenmore could be abandoned, or maintained with a small shuttle service.
Benefits:
Consolidate Green Line service; with only three branches instead of four, there'd be no excuse not to bring light rail down to Dudley Square
Provide more direct service to the LMA; being on the other side of the river, the current Highland Branch alignment does not serve the area as well
Express link, via the Esplanade and Charles/MGH, between the LMA and Downtown (as well as the airport)
The major downside would be the Highland Branch being forced to run on the street for several blocks. So this would probably need to occur in conjunction with either a) an extension of the Huntington Ave. Subway, or b) an extension of the trolley reservation. In any case, there would probably also need to be some stop consolidation on Huntington, as well. [EDIT: actually, looking at the map again, I bet you could swing it by installing proper priority signaling and ditching Fenwood Road, and maybe Mission Park; it's not that long of a stretch.]
As to the other possibilities: I agree that a full Blue-eats-D conversion is a poor idea, though I understand the appeal.
I really like the idea of a Blue Line extension to Watertown and Waltham via Allston, but it just seems so implausible. You'd have to build a massive subway through Allston/Brighton (unless you elevate it, which I would not oppose). It's a little easier once you get over the Pike, 'cause you can use the Bemis branch alignment, but that's far from perfect itself, having multiple grade crossings (likely necessitating another subway) and lots of curves. An elevated would, once again, minimize these problems, but I think it'd be a lot harder to get that to fly out there than it would even in Allston.
A subway or elevated down Brookline Ave just seems more feasible to me than that (regrettably).
