Tough call: as long as we cut down to 27 after the rookie draft, I would agree to abolishign the 35 man limit. The only problem that I had forseen was the lack of good free agents in the following year's FA draft, but indeed, that would not be a problem as the same total numebr ofplayers (35x your league's team size) would still be in play at any one time.

Abolish the 35 man limit between the end of the FA draft in year one, and the Rookie draft in Year 2.

(disclaimer: I have 37 players right now after a 3-for-2 and a 4-for-3 trade effected after the FA Draft).