I am interested in cancelling a hotel reservation made through Hotels.com that was listed as non-cancellable. It's with a hotel currently "sold out" for those dates. Any tips?

could you sell it on ebay?

This is the contract you agreed to:
In some cases, we are unable to permit changes to or cancellations of reservations after they are made, generally for stays during holiday periods or special events. You will be notified before the reservation order is completed and your credit card is charged if a reservation is non refundable or non changeable. You agree to abide by the terms and conditions imposed with respect to any completed reservation order for a hotel stay as specified on the reservation order form.

The bottom line is you agreed to this contract.
If hotels.com doesn't want to let you out of it, they don't have to.
Occasionally they'll bend the rules for extenuating circumstances like a death in the family or illness etc. But they aren't required to.

Is the hotel really sold out or just showing "sold out" on hotels.com? If it's the latter, it could be that hotels.com's room inventory is simply depleted.

At any rate, good luck. Credit card companies really back the hotels when it comes to such disputes.

The Ebay option may be good IF the hotel is sold out.

You answered your own question in the post however, try contacting the hotel directly. Hotels.com is the middleman.

Call the hotel first (or have someone call for you) and find if they have vacancies. If they do, you can always use that as a bargaining chip ("you weren't turning anyone away"). Also, I've found that sometimes when you've landed a GREAT deal by purchasing in advance, the hotel, if a full house & turning people away, will allow a cancellation, as they're able to fill the room with a higher-paying customer. I always deal with the hotel directly in these matters.

eegrub - I saw your reply posted about the Sugar Bowl. I'm interested in buying your room. You can e-mail me at: [email protected]

Ive canceled many hotels made thru hotels.com w/o any problems. Just give the 24-48 hrs advance notice. Ive always just canceled online.