How much do bad contracts actually sink a team?

Bill Simmons' latest worst contracts draft came out today, and I was wondering if there is any direct examples of a bad contract hurting a team. With the way the cap is set up a contending team will probably be well above the cap, which means that even if a team could just dump a contract they wouldn't be able to sign someone else in free agency.

I'm looking for examples of a team that was contending/trying to contend that was unable to sign or retain a difference maker because they had a bunch of money tied up in a terrible contract.