Was it that BHO wasn't "playing ball" or that he stopped taking Blago's calls on the matter? BHO initially wanted Valery Jarrett for the seat, but she didn't want it & eventually took a job as a whitehouse advisor. It could be that BHO had no preferred candidate after that, or he was maintaining "radio silence" while he weighed some other candidates.
Personally, I think the Secret Service got wind of the wire taps & warned the President-elect to sever communications.
Jarrett wanted the seat until someone told her, "You don't want the seat. There is a sting going down and we need to be a million miles away from Chicago. I will give you another plum appointment and we can go back for the Senate seat when the heat dies down."