Assuming the Nazis achieved a "settlement" with the USSR in 1942 (a 1941 Soviet fold is a little too far) with a dividing line somewhere around the Urals or somewhat west of there. They will still need to devote substantial resources in the east. This includes "ordinary" occupation/policing duties, dealing with partisans, setting up death camps and managing massive deportations either to death camp or work camps, and rebuilding infrastructure so that they can use resources in the newly acquired territories. Rebuilding includes bridges, regauging Soviet RRs to European gauge so that the Reichsbahn can efficiently move goods, rebuilding the oil infrastructure etc. The rebuilding can't be ignored because if not done the resources can't be utilized.
OTL the rebuilding of the USSR, even with Lend-Lease and taking resources from occupied countries took quite some time. If you look at all the resources the Nazis used against the USSR 1942-45, I'd make a guess that this scenario gives them maybe 50% back over the 2 1/2 - 3 years. Less at the beginning more towards the end. Remember if they are not using steel for tanks to fight the Soviets, it may be going in to rails or bridge girders, petroleum used to run bulldozers if not aircraft and so forth.
My take on this is that TORCH goes on pretty much as planned, and more or less on schedule the Nazis are out of North Africa. It is possible HUSKY occurs, and if so rather than OVERLORD you see the Allies seize Sardinia and Corsica, and also Crete and some Aegean islands. These play to the Allied strengths. The U-boat war in the Atlantic lasts longer as the Germans have more resources to put there, but shifting to U-boats vs tanks takes time and the Allies have the long term advantage there.
In spring 1945 see the Germans still working to "integrate" the eastern territories, but supreme on the continent. The Allies have won the Battle of the Atlantic, although U-boats are still an issue, and are secure from Syria to Morocco (and all French Colonies/possessions not occupied by the Japanese) as well as Sicily,Sardinia, Corsica, Crete, and most/all Greek Islands. There is a bombing campaign over the continent, but much more peripheral and weaker. Given a stronger Atlantic Wall, stronger forces, a cross channel invasion is probably not possible. Norway? Greece? Possible but unlikely.
Can a bomb be dropped on a major German city? Probably at least once, massive raids elsewhere (at night) and a coastal city like Hamburg or Kiel the target. From there...
Even if on June 1, 1945 the Germans realize the bomb is possible with the attack on Hamburg, it will still take them 2-3 years to build one. The USSR had inside information, and willing to throw lots of resources that way beginning about the same time if not sooner, and it still took them until 1949. Given the situation here, the USA will be working even harder to mass produce and make more efficient/smaller these devices.