Ranking the probabilities, from most probable to least (probabilities heavily influenced by emotion):
1.) Gronk holds out of mini-camp and opening day of training camp before coming to agreement that allows him more $$$ in 2018. This is the Seymour recipe; IIRC, Seymour missed a week of training camp in 2005 or 2006 until he got a salary bump for that season. This was also the Deion Branch recipe, which ended differently. Can't really blame Gronk if this is the plan, and I don't see the Malcolm Butler situation at all playing into how Gronk or the team respond. 35% chance.
2.) Contract extension is announced in May and this becomes all water under the bridge. It's not inconceivable that the two sides meet and discuss a way of getting Gronk some guaranteed coin now while moving some salary cap hits downstream. This could be wishful thinking, but the team does, you know, extend their top players from time to time. 30% chance.
3.) Gronk is traded for a first round pick or package of picks and players (draft means either 2018 or 2019 draft). I'd still be mildly surprised; just not shocked if this was to come to pass. We've seen this happen before. If it was going to happen, I'd much rather a 2018 draft pick(s) than 2019 draft picks, but Bill has not been afraid to trade players for future picks before. I don't see Bill just dumping Gronk for pennies just to get a pick in this year's draft, so 2019 picks could be more realistic. 20% chance, but climbing.
4.) Gronk retires. I will not blame Gronk if this is the path he chooses. Concussions are not something to be toyed with, and he's got a real shot at the Hall even if he retires today. However, given that he's supposedly making noises about wanting a contract extension, I do think the retirement talk is mostly a negotiating ploy. 10% chance.
5.) Nothing changes, and Gronk plays in 2018 for his current contract. This option would normally be ranked higher, but there's been too much smoke to ignore to assume that this will happen. Gronk does have leverage, and will be quite underpaid relative to his peers in 2018. 4.9% chance.
6.) Gronk gets traded for a 2nd round pick or less. Honestly don't see that happening, as this is by far the worst option of all of the above, and Bill usually doesn't settle for the worst option. Yes, letting Gronk retire is a better option than this. 0.1% chance.