Let's get this out of the way - the Orioles are not a very good baseball team right now. The offense has been struggling mightily, and the pitching was horrible for the first month of the season and has rebounded to simply mediocre as of late. The defense, usually near the top of the league, has been average. The team has been making more mental and baserunning errors than we've ever seen in the Buck Showalter era.
The result of this has been what you would expect - a 24-29 record and a 4th place position in the A.L. East standings. If this was almost any other division, the division title would already be looking nearly out of reach. Luckily, the rest of the East has been similarly mediocre, so the O's are only 4.5 games back of the division-leading Yankees.
As bad as the Orioles have played, they're only -7 in run differential, a number that would normally be indicative of a team right around .500. Playing .500 baseball still won't be good enough to win the division, so how can the Orioles improve? We don't have to look far into the past to see a similar turnaround - the 2012 Orioles.
That year, the "turnaround" was a little less obvious - the Birds were 51-44 at one point despite having a -44 run differential, by far the worst in the division. But luckily Dan Duquette and Buck Showalter realized that the O's needed to actually improve to continue winning at that rate, and improve they did. The last 70 or so games of the season, the O's played like one of the best teams in baseball, thanks to a vastly improved rotation and a re-tooled lineup.
That season, struggling starters Jake Arrieta, Brian Matusz, and Tommy Hunter were all removed from the rotation. This season, Chris Tillman and Bud Norris have had similar struggles. Tillman will likely get an extended chance to bounce back, especially since he's had poor starts to a season before (although never this bad), but Norris could end up having a similar fate as one of those three starters. Chris Tillman, at that time still a prospect, made his return to the majors and helped to stabilize the rotation. Perhaps Kevin Gausman could be that guy this time around.
Meanwhile, the Orioles were able to improve the lineup by re-shuffling assets they already had. While this year's team doesn't have a Manny Machado to bring up, they do have plenty of players with positional flexibility, and a returning Matt Wieters. Maybe a random veteran Norfolk call-up can be this year's Nate McLouth (Chris Parmelee?) and bring some much-needed offense to the outfield as well. Obviously this situation is different - the mid-2012 Orioles were already winning despite not being all that good, and needed to improve to keep up the pace. Unfortunately, the 2015 Orioles aren't winning. Luckily the division is far worse in 2015 - there simply aren't going to be two 93+ win teams coming out of the East this year.
Looking at the rest of the division, the Yankees are in the lead thanks in part to huge bounce-back years from Alex Rodriguez and Mark Teixeira, and a dominant bullpen led by Andrew Miller and Dellin Betances. They do have Masahiro Tanaka returning, but A-Rod and Teixeira's health are far from a guarantee, and as we all know bullpen success can be fleeting. The Red Sox were a popular pick to win the division, but their pitching has been atrocious, the lineup hasn't been what it was hyped to be, and they've dug themselves a huge hole already. They do have Eduardo Rodriguez (ugh) and he looks great through 2 starts, but so did Mike Wright, and he's come back to Earth quickly. It's far too early to call Rodriguez a star although he may end up being one.
Another team that's still in the mix is Toronto. Despite their losing record they're +35 in runs, good for 5th best in the majors, and are leading MLB in runs scored per game by nearly half a run. If their pitching improves (or maybe even if it doesn't), the Jays could make a run and end up at the top of the division as well. The Rays are still in it too, even though their roster looks like a last-place team on paper. They'll need Chris Archer to keep up his breakout performance, and for previously unknown players to keep contributing in the lineup, but that seems to be what the Rays do every year. I wouldn't count them out yet.
The bottom line is that while the Orioles have been playing poor baseball, this division is winnable. They've dug themselves a hole, but we've seen this team improve before just by using assets they already had (other than Joe Saunders). If I had to bet on whether the Orioles would win the division my money would be on "no", simply because of the math - the Orioles are one of five closely matched teams. But 85 games could take the AL East this year, and any of the five clubs are capable of doing that. At least we can be thankful that the O's picked a good year to have an awful start.