I´m not so sure that the conquer of Italy in 1571 was such improbable thing. Lepanto could be a open door if the turks won and the turks were not so far of the victory.
In addition, France played a very ambiguous role (a pact could be possible). I can not imagine their performance after the conquest of Italy. One thing is to find an ally against Spain and the Hapsburgs (the first power of the sixteenth century is Spain, not France. You are questioning the reaction of the rest of Europe and not on Spain's own), and another would see the Turks take over Italy. However, the European reaction against this thread proposal was not what really intrigues me but the reaction in Iberia. Italy, would have meant the door to Spain. If Italy falls, that imply the weakness of Spain. If Italy falls, all the Spanish presence in the Holy Roman Empire would be prejudiced and even the invasion of Spain would not be so...impossible