Yes, sic semper tyranus, Milan is cheating. When an AI faction drops to IIRC 3 settlements it gets a special bailout from the programmers.

I am glad to see the general consensus agrees with my experience as to the effects of the levels of difficulty. VH is probably the easiest campaign (stategy) level to play on after the initial rush by 3 or 4 of the AI factions, because usually after I weather that around turn 50 the rest of the campaign is a mop-up and waiting for the Mongols to appear and be toyed with. Were it not for my stupid pride I'd probably be playing on medium level or normal or whatever it is called in the campaign and leave it on VH for the battles.