I agree that this is kind of cheesy, maybe even bugged.
I've had som discussions in earlier threads on what to do to get reconciled and obtain good relations with the Papal states. The solution was quite simple: Just wipe them out!
As the manual says, the relations and "excommunication-reasons" seems to be personal business between your faction leader and the Pope. You kill him, and it's all forgotten by the rest of the Papal States..

This happened in my game: I attacked Rome and killed the Pope. In the following election, I voted on the wrong Pope and (apparantly because of this) continued to be excommunicated by the next one. He popped up right next to Rome, together with the remaining Papal States army. They attacked Rome in the first turn, but I won the battle and killed this Pope too.
The next election I had learned from my faults, and voted on the right candidate. Because of this support, I got reconciled and my relations to the Papal states became excellent! (8 or 9 on the Pope'O'Meter). This Pope popped up out of my sight, but after a couple of turns he arrives with a boat on Ajeccio (which I control). And for 10 turns or so now, the remaining Papal State Army (2 stacks or something) is just standing still doing nothing, while the Pope himself is standing on Ajeccio doing nothing.
This seems to be bugged or something, but works ok for me..