I liked the boulevard option, personally. Replace the viaduct with a wide, ground level boulevard and designate that street plus the remaining freeway as Business I-81 (with the green and white shields instead of red, white and blue). Re-designate I-481 as I-81 and add another lane in each direction, since most of the through traffic will likely wish to go around.
Yes, this will be more expensive than the community grid, but so be it.
Probably the best option.
Tunnel is deranged.