Thanks to some good advice in the Naples thread, I've come to live quite well with the excomms: As soon as I control Italy (with the exception of the Papal States or some other lone reservoir province for the Pope to starve in) the problem is basically history. I simply keep a high-level assassin in a border province, wage war against whoever I want or defend myself offensively and if I get excommed....well, since the Pope usually has a very low command rating, it's no big fuss: Pope dead, excomm void. Rinse and repeat. As long as he still owns a province his successor will come back next turn. Just take care that the his income is more or less eaten up by his remaining troops to prevent the construction of border forts, clearly the achilles heel of this plan.
To answer your other question: I don't know whether the Pope can be ransomed.... would be interesting to find out, though.
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