I agree that Nasso is not the only answer and yes, his career too has floundered, perhaps an indication that getting back together would be positive for both of them.
Seagal does need to look to changing who he is working with. Though I am in the minority, I think that the ending of the relationship with Nu-Image was a bad thing. Though for many years they were known to be peddlers of (very) low budget horror and action films they have moved on. 16 Blocks the latest Bruce Willis action film was produced by them, and upcoming projects include The Contract starring Morgan Freeman, John Cusack and Corey Johnson, The Wicker Man , a remake starring Nicholas Cage, Brian de Palma's The Black Dahlia (all 2006) and 88 Minutes (2007) starring Al Pacino. Seagal could have been at the forefront of Nu-Image's push into the mainstream but due to his behavior they have ceased working with him.
Seagal should look to the example of Van Damme who is firmly in control of his career. His last few films have been positive steps forward and Seagal should look to work with producers like Phillipe Martinez and directors like Ringo Lam. If Van Damme can do it then so can Seagal. He should also look to, as you say, making more films in Asia. Not only have they been relatively successful (Belly of the Beast (2003) and Into the Sun (2005), but they actually engage Seagal whose interest increases appreciably. That is a key component for him in getting his career back on track.
Seagal should also perhaps look to work with some of the director's he has worked with before. Although Bruce Malmuth died in 2005, all the other director's are still alive and nearly all are still directing. Indeed even excluding Andrew Davis, who has said he would never work with Seagal again, some have had further success. For example Dwight H Little has also directed Wesley Snipes in Murder at 1600 (1997) and now directs episodes of 24 (2001). Félix Enríquez Alcalá has directed episodes of CSI: Crime Scene Investigation(2000), ER (1994), and The Shield (2002). Andrzej Bartkowiak has directed Jet Li in Cradle 2 the Grave (2003) and The Rock in Doom (2005). Albert Pyun has gone on to direct More Mercy (2003), Max Havoc: Curse of the Dragon (2004), and Infection (2005).
If he continues to work with people like Andrew Stevens I think his career will only sink further into DTV hell. It is a shame that Cannon films are not around anymore as they would surely have boosted Seagal's career.