If it's Monday there must be a new Lucent Technologies Inc. (NYSE: LU) rumor circulating.

Lucent's shares spiked this morning -- rising nearly 20 percent, or $0.28 to $1.79 -- on renewed hopes it could find some sort of partner that would either aquire part of its business or buy the company outright.

The latest Wall Street buzz says that long-rumored talks between Lucent and defense contractor General Dynamics (NYSE: GD) have reached a more serious stage. These rumors, as well as others, have now been circulating for some time. Another theory has Lucent talking to giant conglomerate General Electric (NYSE: GE). But many sources remain highly skeptical of such talk.

Indeed, a possible combination with a large defense contractor, General Dynamics, raises more questions than it answers. The only connection might be a few of Lucent's relatively small government contracts.

"That doesn't make any sense at all to me," says Tim Krasky, a partner with YankeeTek Ventures. "Why would GD want to buy a company with so many problems?"

"They've talked to GD about various things for years, but it's always been about little things," says one hedge-fund manager, asking to remain unnamed. The source said that this morning Wall Street players were circulating rumors that the companies had entered a due-diligence stage. "But I don't think it's true."

Despite the skepticism about such deals, there was enough firepower on Wall Street to lend the talk credibility. Lucent shares have nearly doubled in the last two weeks, since Light Reading reported rumors that investment bankers were circling the company's ATM switching business (see Cisco, Sycamore Circling Lucent's ATM).

Meanwhile, talks with Cisco Systems Inc. (Nasdaq: CSCO) and Sycamore Networks Inc. (Nasdaq: SCMR) about Lucent's Westford, Mass., unit have hit a snag, confirm several sources. The problem with the deal is simple: Lucent wants more money than anybody is willing to pay. Cisco and Sycamore are said to be interested in buying the unit for $200 million to $300 million; Lucent wants more like $800 million, say sources close to both companies.

Despite the fact that Lucent has yet to find its match, the company is motivated by its need to further downsize and its thirst for cash, and many expect it to make some sort of move to either sell assests for find a buyer.

Both General Dynamics and Lucent declined to comment for this article.

— R. Scott Raynovich, US Editor, Light ReadingWant to know more? The big cheeses of the optical networking industry will be discussing multiservice switches at Lightspeed Europe. Check it out at Lightspeed Europe 02.