1. During the Civil War, Pro-Treaty and Anti Treaty factions end up dividing the Republic such that the PT gets Leinster and most of Free Ulster, AT gets Connaught and Donegal, and Munster (where fighting is worst and each side commits atrocities) is split.
2. Irish Communists, mostly veterans of the Limerick Soviet, take control over Munster. The populace, tired of the war crimes of both IRA factions, support them.
3.The UK intervenes again on some pretext, conquering all of Ulster as well as Midhe. Realising its not worth it to hold the entire island, the cede Midhe back to the Pro Treaty Republic, seeking to bolster its legitimacy, on the caveat that it (with Dublin) is administered as an autonomous zone. In exchange, the PT Republic recognizes British sovereignty over Ulster.
3. The AT faction, seething over British and PT betrayal, never reconciles, and neither faction is strong enough to take out the other without falling to the Reds. A cautious truce emerges.
4. In Ulster, the larger Irish population is nust as disadvantaged as OTL, but has more power of numbers. Ultimately, the compromiae of releasing only the North as a dominion is reached.
Edit: this might be better in After 1900.