As to city revolts, I think they most be done realistically, not artifically (no moving capital). There are enough cities that can easely rebel (Hamburg, Stettin, Marseille, Milan, Bologna, Venice, Budapest, etc etc).

Also I think we shouldn't disband too many armies. Electors should get their own little armies with which they decide to protect something they call theirs (read further down). Armies should simply be split up.


Steps I would take:
1320: Massive rebellion in the Reichs Armies, some cities lose garrisons, other get disbanded. Only the crack troops of the HA stay loyal to us, and only those Armies with commanders with authority and a great name (think of Hans or Arnold, or even Ansehelm (he conquered Moscow)) remain fully intact. FH, or someone else, will give out a little mod that TinCow will use for 2 turns. This will make sure many more rebel armies spawn (this can be easely done by changing a number).
1322: The rebellions continue and the Diet begins to talk. Because we foolishly agreed on an CA we cannot impeach Lothar, but we do call on a Emergency Session at the end of this year (more a less official one) in which 2 main sides (I already see people as Lothar, Ansehelm, Helmut and some others grouping together, as they share similiar views) form and argue with eachother, this only results in more chaos. We decide to be ruthless to the normal people the plebs, which results in even more chaos and rebellion.
1324: The Chancellor loses control of the armies (well IC he does, OOC he doesn't). Noblemen start to use their army for what they think works best, Dieter Bresch for example could start attacking the Turks (as he wanted to) against the Charter.
1326: Things keep going worse and worse more cities rebel (hopefully) and quickly armies are formed from those armies that are still left. The Kaiser is still in Byzantium, because his wife doesn't want him to go back, and because the road is blocked by Hungarians. The armies proof not-capable of defending the Reichs borders and those electors that are still of reason decide to retreat to a Heartland Reich (hopefully 5 cities close to eachother won't rebel) and defend that. While others have small armies or loose bands and they wander around a city they claimed as theirs.
1328: It continues electors keep arguing and nothing gets done without proper leadership. Some advocate a independence of the Outremer as a Crusader State, some want to give it up as they don't like it. Others want to go out to fight and others want to keep what they have now. At the end of the year Kaiser Siegfried returns to Rome ... or Frankfurt, or whatever, and he imprisons Lothar claiming he is responsible for all this (Lothar gets released for lack of evidence later on) and he tries to bring some order back into the Reich by starting recruiting armies again.