Basically the division that we decided to do was...
International free agents subject to spending restrictions = domestic prospects who did not hit AA (cannot be waiver drafted, must MLB debut to be added).
International free agents not subject to spending restrictions = domestic prospects who did hit AA (can be waiver drafted, are free agents (anyone want Luke Jackson?)).
We treated Aledmys Diaz as a legal claim last year I think. http://www.bluejaysmessageboard.com/threads/25-A-Very-Darrelly-Dynasty-League/page234
You can see all discussion on the issue this season starting here http://www.bluejaysmessageboard.com/threads/25-A-Very-Darrelly-Dynasty-League/page716?highlight=international
If there was mass confusion on this then it's my fault and I would have no issue dropping him