Ah, finally one of my favorite computer related AHs... I think it is difficult to get a 'maximium' C128 without delaying (or no) Amiga (as much as I loved my A1000). IIRC it was the very impact of Commodore/Atari introducing 16bit machines that led to the hastened introduction of the C128 as we know it, and it was probably the Amiga that triggered the arms race that probably killed the last, peak 8bit generation of home computers.
One problem with OTL C128 was that the specifics were result of a poll among C64 users on the Consumer Electronics Show in summer '84 . Many wanted a C64 compability, but also a C/PM mode. The prototypes were made in only 4 months (!) to be ready for the CES in January '85. Commodore at that time was in a transitional time after Jack Tramiel and some engineers left (for Atari), also the development was led by a young and unexperienced designer. So the C128 was obviously a very rushed design OTL. In order to get a better C128 by early 1985 developement has to begin earlier.
So: Tramiel/Atari buys Lorraine (proto-Amiga) in summer 84,Commodores last ditch atte mpt fails. Tramiel plans to produce a cheap, advanced 16bit machine rather soon. OTL Amiga 1000 was presented in Summer 85. But here there are some conflicts - Tramiel wants a the Amiga 256 cheap, stripped down mass market model compared to the original vision of a highly advanced system. Problem: Commodore still is not in a position to develop a 16bit machine in time (because of the brain drain to Atari.) So they have to get a somehow competitive 8bit machine on the market. The actual POD is early summer, so the user poll is butterflied away. So no CP/M required, which possibly frees up some resources (?) Also, without an Amiga to present in the following summer, the C128 is projected to be ready for the CES in summer 85.