At least you have a challenge! I ended up with a civil war last time I played the Italians, too - though it was a lot earlier in the campaign and wasn't complicated by any re-emergences. I'd gotten lax about keeping very loyal generals at the top of my stacks and the crap hit the fan when the king died. (I'm glad to hear you didn't just reload - these are the kinds of suprises that keep me playing MTW.)
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