So this is something I've been toying with for a long time now, but haven't really got much further than some scribbled notes. But I'd be curious to see others' takes on the idea, too.
What if, along the lines of the RW proposals, in the beginning of the 20th century the British Empire was reformed as an EU-like federation of states; each has its own local parliament to handle domestic affairs, and there's an Imperial Parliament at Westminster to which MIPs are elected from each of the member states (initially I've been thinking - by the start of WW1 there'd be UK, Eire, Canada, Australia, New Zealand... later on, others then like South Africa and India in the 1920s or early 1930s... and bit by bit other colonies become transformed into full-fledged member states of the federation. Kinda a "good for all parties" solution - Britain holds on to the resources of the Empire, the Dominions and colonies are transformed, enjoying full IF citizenship on a footing equal to that enjoyed by pre-federation UK citizens.
How would the rest of the world react - USA? France? Germany? How would WW2 play out?
I do have my own ideas, as I mentioned, that I'm playing around with when I don't feel like working on AltCan, AltBC or AltHun, but I'm very curious as to what everyone else thinks about this... :)