I don't specifically remember the talk about the Pens moving to Milwaukee. It makes sense. I thought Milwaukee was a pretty good hockey town in the 80's. I went to 1 or 2 games back then and followed them in the newspaper off and on. Pittsburgh has struggled to put butts in the seats for most of their professional franchises. Especially in the late 70's and early 80's when US Steel began to die and shook the whole city.
I found a yahoo Q&A where a couple of people mentioned the 80's pending deal. This link is 7 years old so it shows Pitt was struggling again just a short time ago.
http://answers.yahoo.com/question/index?qid=20061224234704AATj0Ou If it were up to me I would say Phoenix is the best fit. They have been wanting to relocate for a few years. The Islanders will never move but I have always thought it dumb to have 3 teams in NYC metro.
The nice thing about being Milwaukee is they could grab a team from the east or the west and it would still work out. Columbus or Florida could also be on their short list.