Mutch arrived at Selhurst Park in a £6 million deal from Queens Park Rangers a year ago, but made seven league starts all season.
Jordon didn't play Mutch for Palace last season
And according to the Sun, Palace hope to dump the injury-hit midfielder on the relegated Canaries, with Eagles boss Alan Pardew setting his sights on Townsend.
Townsend, who was omitted from England's 23-man squad for the European Championships, is available for £10.5 million, the Guardian reports, because of a release clause in his Magpies contract.
Townsend failed to make Roy Hodgson's final 23
The 24-year-old scored four goals and set up another two in 13 appearances for Newcastle, having completed an £8 million from Tottenham Hotspur in January.
And, according to the Guardian, a return to the capital with Palace would net Townsend £80,000 a week - putting him alongside Yohan Cabaye as the Eagles' highest earner.
That is a whole £5,000-a-week more than what the Daily Express claims Newcastle are offering to keep their star man on Tyneside.
At £75,000 a week, Townsend would be the Championship's highest-paid player