AFAIK, there are no waitlists associated with cash rooms. Period.
Again AFAIK, there is no way to waitlist for a points room at a non-home resort prior to the 7 month window. (If there is, there shouldn't be as it would violate at least the spirit of the 11/7 month booking rules). So you have to call at 7 months to get a points room and then you could cancel the cash reservation - there is no penalty for cancelling the cash reservation.
MS reportedly will automatically convert a rack rate cash reservation to one with the member discount (if one becomes available), but members who want cash reservations must call to get the cash reservation in the first place and hope to "get lucky".