From SI’s Jon Heyman:

Yankees outfielder Xavier Nady has been diagnosed with a ligament strain in his right elbow and will avoid surgery, has learned.

The Yankees feared originally Nady could be lost for the season with a completely torn ligament, but a review of multiple X-Rays revealed what doctors are now calling merely a strain. He will likely need to rehab the injury for a period of weeks.

That is good news for Nady. He will probably be back by June. If Matsui can play offensively the way he did last night, then the Yankees will be ok until Nady returns to give them more punch.