I'd have avoided a break with continuity altogether (other than maybe getting rid of his Superboy days if you could somehow get away with it) and just utilized the housecleaning Steve Gerber offered in the last issue of DC Presents - Kandor, the Phantom Zone, Bizarro, and Mxyzptlk are off the table, so there goes all the 'silly' stuff DC would have wanted rid of along with Supergirl, but the Zone and Mxy at least would have been easily retrievable, and you can always make more Bizarros. And since Metropolis was inundated with Kryptonite, you could have told stories of a powered-down Superman on his home turf (until that status quo inevitably one day ended), while still able to do big cosmic Superman stories elsewhere.