I always like TLs when the little guys stand up to the big guys, especially in Eastern Europe, kudos to KnightofTempest for his idea and efforts, but i too must point out the less than realistic technical/technological alterations, which more often that not spoil a good TL, at least to some of us more obsessed with such little details.
Just to touch a few things, i think it's very unlikely to have the germans export Bf-109s or Ju-87s at this point to Hungary or Bulgaria, they couldn't built enough for themselves. Also all the a smaller airforces are too advanced for 1938 imo, i'm sure more realistic equipment OOBs can be drawn, still maintaining the numerical factor. Note that Bf-109B/C/D of 1938 won't be THAT superior to latest PZL-24 and Avia B-634, which can be used as stopgaps until a more realistic monoplane fighters timeline delivery.
As for technical cooperation, i see the czechs taking the lead in tanks and artillery, building together with their allies Poland, Romania etc. the LT-38/TNH (actually built in 1936 despite the designation), AH-IV tankette and perhaps other armoured vehicles like SPGs of which they had several prototypes of, excellent Skoda field artillery and Tatra trucks etc. I see the poles however having their excellent PZL-37 build in both Czechoslovakia (instead of SB-2), and Romania (instead of SM-79) but with GR 14K and then N engines, which were already built in Czechoslovakia (just the K in OTL, but surely the N would follow). Btw, PZL-23 is not a dive-bomber (and IAR-24 is a civillian plane, though i like what are you trying to do, i always thought of a military version of IAR-24 myself, fighter or light bomber- i'm romanian btw), i would have it powered by Walter GR14K engine rather than Avia HS-12Y, and i would use the 12Y for this bad boy, which again would be enthusiastically adopted as a fighter-bomber and dive-bomber: the PZL-38. With two 12Y engines with steadily increased power it would be a very competent machine. I would though keep the new fighters separate (because i like them all), and to give some uniqueness to each country, but accelerate them as much as realistically possible, so B-35/135 and PZL-50 deliveries (fitted with GR14K or N engine) and the romanian IAR-80 would start in numbers in 1938. Could have the PZL-46 developed as a dive-bomber from the start though, and could have it in initial service in 1938-39. Later, the successor of PZL-50 could be the PZL-55, fitted with improved 1000HP 12Y engine, probably equal in every respect to Bf-109E of 1939. Finally you could have the Praga E-51 with GR14M engines adopted as a recce machine for both Poland and Czecholsovakia.
I'm not sure whose side is Italy, are they still selling to anyone with money? They could still sell to both Entente and the opposing Bulgaria and Hungary then, is that correct?
Anyway, just my ideas as to how all this could be made more realistic, no offense intended really.