A longer, more indecisive WWII leads to the collapse of both the Nazi regime and the Soviet Union, resulting for the Baltic area in a situation akin to the one following WWI. The Western Allies dismember Germany and Russia is divided for an extended period by a new civil war. A centralized, stable state starts to emerge out of the Russian mess in the late fifties, but it will stay externally weak for decades. Germany is allowed to reintegrate post-1970, partly as a answer to the resurgent Russia, but reintegration is slow and the new democratic, highly federalist Germany has no designs towards Eastern Europe.
Since the Soviet/German occupations of 1939-1947, the Baltic states have retained their independence.