A lot of good ideas already posted. Good job guys.
Fairfax Ave widening. Absolutely. The whole street maintains two lanes of traffic in each direction, except between Olympic and Venice. If this section were either widened or parking restrictions put in place to provide two lanes of traffic in each direction (ideally at all times, minimally at extended rush hours 7-9:30 and 3:30 - 7) it would do wonders for that street.
[The portion between Pico and Venice was actually widened about 35 years ago. I remember the old configuration was similar to parallel streets like Orange Grove and Hayworth. Because of the traffic volume parking on one side was prohibited at all times, so that they could comfortably fit one lane of traffic each way. But it was very bad. The widening to the current configuration is only slightly helpful, done to match the width of the Olympic-Pico section, which is how I remember it for most of my childhood. Basically, the parkway (grass between sidewalk and curb) was removed to widen the street without the need for eminent domain. Given the traffic, though, figuring out how to get two lanes in both directions would be critical.]
Grade separation of San Vicente here (and at La Brea Ave) would be very helpful. [The intersection with La Brea isn't that bad, but the street has to go down a steep hill on both sides, so an actual bridge should be easier for traffic. In fact the old Pac Electric Ry crossed over on a bridge here for that reason, to avoid the steep hill.]
But if that is not feasible, than an actual plan that might work would be a street minimization of SV, the least traffic heavy of the three streets. Widen the median and get rid of its traffic capacity between Wilshire and Venice.
This would require some extensive work to really make it work.
A left turn from Burton Way to Sherbourne should be implemented to help get some Burton Way traffic toward 3rd street in a better way. The block of Sherbourne between Burton and 3rd should be one-way northbound.
Most of the continuing traffic should be encouraged to make a left on Wilshire*. Of the three lanes eastbound, the left two should force a left on Wilshire, with only one lane of traffic continuing east of Wilshire. That remaining one lane should be forced to make a right on Carrillo. Likwise, in the westbound direction, SV is only one traffic lane between Carrillo and Wilshire (with some widening at the Wilshire corner to account for waiting at the signal). SV will be one lane and one way WB between Fairfax and Carrillo. Barrows would be one way eastbound.
SV is also one lane and one way WB between Olympic and Fairfax. This segment of street will be forced to make a right at Fairfax with a stop sign. This eliminates the signalized intersection of SV/Fairfax.
SV will be one lane in each direction between Olympic and Venice. Westbound, all SV traffic is forced to make a right turn onto Genessee (which will be one way northbound) and can reach Olympic at the signal at Genessee. (THis of course means that SV is one way EB between Olympic and Genessee.) These steps eliminate the signalized intersection of SV/Olympic.
When all is said and done. We have a regular intesection of Olympic and Fairfax, that hopefully maximizes Fairfax's capacity as discussed in the first paragraph. SV still exists, but east of Wilshire, while it is still very wide median, it will only carry one lane of traffic in each direction and will be broken in such a way that it does not cross Olympic/Faifax directly. WB traffic on the single lane SV will make a right on Genessee, a left on Olympic, and a right on Carrillo, and a left on SV to continue in this manner. EB traffic will make a right on Carrillo, left on Olympic, and then a right on SV (at Orange Grove) to continue. But given that the traffic patterns are no longer as direct, a lot of SV's traffic will be distributed amongst other streets in the area and fewer will need to travel this route. Other than SV, most large streets in the area form a grid, and most of the traffic will follow the gridded streets and no longer take advantage of the SV diagnoal, east of Wilshire.
NYC eliminated much of Broadway becuase of the traffic effect at the crossing of avenues. Broadway's traffic simply was dispersed amongst other parallel streets. The same can happen with the eastern section of SV.
The above will never happen. The underpass is more feasible.
* Very similar idea of the other SV/Wilshire intersection in Brentwood.