French victory in the Franco-Prussian War.
1871 - The French humiliates the Prussians and occupy the Rhineland.
1872 - As the German states continue to lose battles to the French, the Southern States seek for Austrian help.
1873 - The Southern states change sides and Austria joins the war alongside France to humiliate Prussia and annex Silesia.
1874 - The battle of Berlin starts.
1874 - Russia and Britain get worried about the break of balance in the European Concert if Prussia falls apart and try to mediate peace talks.
1874 - Notwithstanding British and Russian efforts, the Treaty of Frankfurt is gravely detrimental to Prussia with the following clauses:
1900's - On the brink of ATL World War the Rhineland and Saxony unite to try to enforce their neutrality during a possible revanchist war between Austria and Prussia.
- An indepent and neutral Kingdom of the Rhine is established;
- An Austrian-led South German Confederation is created;
- To counter Prussian agressiveness and create a functional buffer state between Austria and Prussia, Saxony quits the North German Confederation and annexes the small Thuringian States and Silesia.
1880-1890's a nationalist movement, with liberal a conservative factions, in all three states forms to create a united Germany and expel Austrian influence.
Both factions consider themselves the heirs of the Hambacher Festival of 1848.
Once the genie of nationalism is unchained by the Napoleonic Wars and the revolutions of 1848 there is no turning back
Austrians are not foreigners.
They're just as Germans as any other German State, they only happened to have a large allophone empire. That's all, you cannot play the nationalist card to throw Austria out. Both the Habsburgs and Hohenzollerns can profit and lose from nationalist fervor. They risk a lot by playing the nationalist card and 1848 is, indeed, the best example why they wouldn't do it IMHO.
Oh, you certainly could play the nationalist card against the Austrians, precisely because of that large non-German empire of its that it was loathe to part with. The Austrians may well be your brothers, but the Hungarians, Slovaks, Poles, Slovenes, Croats, Italians, and others who come with them definitely aren't. (Without even getting into the Czechs, with whom pan-German nationalism had a very complicated and very awkward relationship.) That question on the compatibility of the Habsburg polyglot empire's compatibility with a pan-German state was a major part of OTL's Kleindeutschland vs. Großdeutschland debates.