Thanks for the feedback, Mr_I.  To respond to the first three questions, I think X could bring some valuable inputs into the picture, but I could find the expertise elsewhere.  Also, X doesn't really need redemption because X's bad rep is a secret known to very few.  X is actually very highly regarded overall.  The person who stopped me from inviting X was one of those few people who was privy to the dirty laundry and this person didn't want to see me get burned.

If I were to apply the same questions to Y, the project would not suffer without Y.  And as for redemption, hmm... I'm sure it will do Y good to be a part of this project, but I'm not sure it will do the project much good to have Y around.  Y has more to gain.

Finally, yes, I think I will talk to someone at work about this. 

I do appreciate theSpokedom's indulgence, though.  Blogging has lightened my mental and emotional load considerably.