I have a hard time envisioning Leningrad surviving if the Germans manage to clear the area west of the Volkhov river.
So if the losses sustained by the Volkhov Front in this ATL is large enough; going for this alternative might very well be the best option.
Based on information I managed to get from this thread:
http://forum.axishistory.com/viewtopic.php?f=79&t=224699&p=2040174#p2040174
It would seem Operation Moorbrand, the cutting off of the Pogostye salient would delete 8 rifle divisions, 1 marine brigade, and potentially 1-2 tank brigades holding the base of the salient. That would leave 4th Guards Rifle Corps, 1-2 tank brigades, and 281 Rifle division outside the salient. 4th Guards Rifle Corps had 3rd Guards Rifle and 4 Rifle brigades (not sure about any artillery attached).
An issue with Moorbrand as a jump off point for an offensive is that the pocket would end up like the 2nd Shock Army salient, which took a long time to liquidate, though given the artillery that would have been available it might have gone a lot quicker, but not quickly enough to avoid the Soviets moving army reserves into the area. Also the area behind the salient had few if any roads and was very swampy, so a major attack force in the area without the winter frost may be pretty tough given the residual Soviet forces plus reinforcements.
One thing that might help is using that operation as a misdirect. Create the pocket and liquidate it with existing divisions plus 12 Panzer slashing across the rail line at the base of it, plus one fresh division coming in in May to do the operation in June. That fixes Soviet attention to try and liberate the pocket, which then allows the 3 fresh divisions sent in June plus further siege artillery and say 5th Mountain to attack the rail line in the Soviet 8th army's sector where the Soviets historically launched the Sinyavino Offensive out of. Using the heavy artillery, plus 4 attacking divisions organized into a corps, spearheaded in the hilly area by 5th Mountain along the rail line to Volkhov would catch the Soviets by surprise in early July if the fixation is on the Pogostye pocket set up in mid-June. IIRC by early July there was only 1-2 Soviet rifle divisions holding the area near Sinyavino, the 128th Soviet Rifle division. The Soviet 8th army had some reserve units based on a situation map from July 16th 1942 I found from this website:
http://wwii-photos-maps.com/
I think I'm seeing 1 RD, 1 Brigd., and one tank brigade. Hopefully some of those might be drawn off by the Pogostye situation, but if not the 4 German divisions should be able to handle them, even given the terrain. The thing is there was a Soviet RD and mountain brigade of the 8th army nearby, but neighboring the Pogostye salient, so I'd think they'd get sucked into that situation and be screened by the German division opposite them that won't be engaged offensively in my suggested plan. I'm going to assume they won't be a major factor in stopping an attack out of Sinyavino. With some of the heavy artillery train allocated, let's say half, the other half fighting the Pogostye pocket, they should be able to rip the Soviet 8th army apart and advance on Volkov via the rail line from the west, while the 54th army is engaged heavily trying to hold it's position together and liberate the 2/3rds of it's troops in the Pogostye pocket.
It looks like and offensive against the Soviet positions West of the Volkhov river is very doable and even if it results in high losses, say even higher than the Sinyavino offensive of August-October 1942, which cost the German 26k casualties, let's say worst case scenario for the Germans 50k losses, they would have pretty much wiped out the Soviet 8th and 54th armies, cleared the west bank of the Volkhov and set up very defensible positions, plus of course eliminated Leningrad. All in all those 50k casualties would eliminated probably over 500k Soviet troops or even more, from the Oranienbaum bridgehead, the Soviet Baltic Fleet, the Leningrad defenders, and the 8th and 54th armies. Plus it captures the factories in Leningrad and over 1 million civilians supporting the Soviet forces in Leningrad, and frees up the Axis forces screening it, plus then leaves the heavy artillery park used for the offensive to pound the Soviet bridgehead left on the Volkhov after 2nd Shock Army was wiped out, which was causing the Germans a lot of problems. Then add in the ability to launch an offensive and capture Karelia and Murmansk and eliminate another 250k Soviet soldiers, plus 25% of Lend-Lease and free up Luftflotte 5 for other operations.
Even if we go worse than 50k casualties and say the operation costs AG-North 100k casualties that is more than worth it for the vast strategic gains. For comparison just holding the Demyansk pocket alone in the winter of 1941-42 cost AG-North over 65k casualties with no strategic gain compared to withdrawing west to more defensible positions, which they had to anyway in 1943.
Edit:
even better information came in about the 54th army:
http://forum.axishistory.com/viewtopic.php?p=2040186#p2040180
On 30.6.42:
294 Rifle Division - 5 286 men
281 RD- 3 850
80 RD - 4 985
11 RD - 3 837
311 RD - 6 170
198 RD - 4 280
177 RD - 5 821
115 RD - 4 371
285 RD - 4 571
3 GRD - 9 478
6 Marine Brigade - 2 099
32 Rifle Brigade - 2 576
33 RBr - 2 757
137 RBr - 2 328
140 RBr - 2 669
16 Tank Brigade - 683
98 TBr - 845
122 TBr - 1 347
124 TBr - 696
21 Artillery Regiment - 1 060
24 Artillery Regiment - 1 095
13 Artillery Regiment - 1 084
40 Artillery Regiment - 920
51 Rocket Battalion - 325
115 Rocket Battalion - 315
Total 73 448 men in combat units.
Totals in the Volkhov Front on the same day:
8 Army (2 rifle divisions, 1 rifle brigade) - 24 712 men
54 Army (10 rifle divisions, 5 rifle brigades, 4 tank brigades) - 73 448
4 Army (3 rifle divisions, 2 tank brigades) - 20 523
59 Army (8 rifle divisions, 2 rifle brigades, 2 tank brigades) - 48 232
52 Army (4 rifle divisions) - 24 388
2 Shock Army (remains) - 4 210
Front's reserve (2 rifle divisions, 3 cavalry divisions) - 32 708
total 228 221 men
So by late July the Soviets don't have a ton of manpower on hand, so if 4 fresh German divisions can be brought in that would make a huge difference, as they have about 14k men per division, which makes the 4 divisions nearly as strong as the Soviet 54th Army units in the Pogostye salient. As far as I can tell at least 60% of the strength of the 54th army would be in the Pogostye salient/pocket. Front reserves are substantial and probably would get moved in to help relatively quickly, but with the fixation on the Pogostye situation if started in mid/late June then by say July 10th 4 divisions concentrated against the Soviet 8th Army would be able to overwhelm them, as they would be roughly twice as strong and backed up by a powerful heavy artillery park. Soviet Front reserves would likely be diverted already, so they should be able to overwhelm the Soviet 8th Army pretty rapidly before the Volkhov Front could substantially react. That should collapse their position west of the Volkhov river within a month and probably see over 100k Soviet troops made casualties in the process.
I can't see the Germans suffering more than 50k casualties in the process with this in mind, especially with the majority of the 54th Army having put itself in a pocket.
With the west bank cleared and Ladoga and Volkhov city taken or put out of commission by close proximity of German troops, that would shut down both the main supply port and rail junction supplying it out of commission and start the starving out process of Leningrad. That should take probably 2 months starting in late July/early August. By October Leningrad should surrender and with it all told probably close to 500k combatants within the city area including the Baltic Fleet.
Of course for this to have happened Sevastopol couldn't happen to ensure the necessary forces are available in June/July and the right strategic conceptions are had at the right time. Doing this before even considering anything about Sevastopol is beyond logical given the strategic implications. In fact it is incredibly stupid that OKW thought Sevastopol should come first, even given Case Blue. Clearly they thought that Leningrad would be taken soon thereafter, but clearly did not appreciate the logistical requirements to make that happen.