More from People:
“Katie is disappointed and hurt that Touchstone doesn’t value her as much as her other co-stars, especially Sandra Oh and Isaiah Washington,” the source says.
A rep for ABC Touchstone TV had no comment.
Honestly, I don't think it's time to panic yet. Actors break off talks all the time (it just happened with the stars of "Law & Order: SVU") and still end up reaching deals. Maybe the Golden Globe nominee is just trying to see how much ABC values her. Judging from some of your comments these past few episodes, I may be one of the only Izzie fans left, but I think Heigl adds a lot to the show, and I hope she sticks around. Here's a story that explains the background of the "Grey's" contract talks, if you're into that sort of thing.