Yes, Takanohana is excellent and I always enjoy watching his matches. I'm not sure exactly what's going to happen. I read things on the mailing list and there are some very knowledgeable people there, but not everything is facts or news. Some of it is just rumors of what's supposed to be being talked about. I don't think anything official has been said about asking Takanohana to retire. I think the rumor is that if he doesn't show up in September, he may be asked to retire. I don't think that's definite though.
Someone did post a copy of an interview with a former yokozuna, I believe, who kind of said the best way for Takanohana to come back is to do one of the off-month tournaments that don't count for standings before doing the real thing. But since there won't be one in August, he'd have to skip the September basho to start with the off-month one in October and then try for the full comeback in November. I think that's what the person interviewed was suggesting he do, take the time needed to heal and come back a little more slowly.
Apparently Takanohana is really carrying the popularity of sumo right now, too, and many people want to see him -- a message said that the announcement about him missing this tournament was delayed as much as possible so that ticket sales wouldn't be adversely affected. I guess Musashimaru just isn't as popular as Takanohana. *shrug* But if Takanohana tries to come back too early, he risks not only reinjuring his knee if it's not fully healed, but a poor showing and essentially forced retirement by not living up to the standards of a yokozuna. Well, I guess we'll just have to wait and see what happens. The current basho just started, so there's two full months before the next one starts. Perhaps he will be ready to come back then.