Oof! You had me on edge here. I'll be interested to see what a surviving house of Rurik will do.
I always thought a surviving Ivan Ivanovich - especially under the circumstances which occurred IOTL - was an interesting concept and a great wrench to throw into Ivan IV's program. However, Ivanovich's survival does not necessarily ensure the long term survival of the Rurikids...
Great Chapter.
I guess that by now, given that seems that the Russian menace would be gone, at least in the near future, the interest of the Lithuanian in keeping/strengthen the union with the Poland would be reduced. Also the Polish aristocracy would take the chance to back to hard pressed to the King and/or continue to get more powerful and thwarting the Crown attempts to keep it.
Besides, of course, of whole religious aspect that seemed how a clocking bomb waiting to explode in a multisided (religious) civil war...
These, seemed, an imminent conflict would be one where alongside or masked by the religious one, would be being fought one, interfactional /confessional war by the Polish Crown and the aristocracy and, among them, by the hegemony, within the Protestants and Catholics.
Also, perhaps, and not only in Poland, would start a fight between the different protestant branches and/or within 'hard core' and traditionalist..
A war that quickly would to spread and internationalize and /or to get involved both the strengthened HRE (that would want to intervene) and the Ottomans, that possibly, would take the chance, to attack to their distraught/weakened neighbours...
The Russians are less of a threat for the moment, although the pro-Russian Cossack hosts have filled much of the resulting vacuum, so the Lithuanian nobility is still feeling a bit insecure without Polish assistance. Likewise, the Russians were far more successful on the Lithuanian front here than they were IOTL (having reached Kiev), so the fear of being overrun by the Tsar's minions is still especially present in Lithuania, the internal discord in Russia notwithstanding.
Religion is definitely a point of growing contention everywhere, even in Poland-Lithuania, with its well-developed policy of tolerance. For one: Sigismund II's oldest son, Casimir, is married to Juan Pelayo's daughter, Ana Claudia (Anna Klaudia in Poland-Lithuania), and her Spanish upbringing is having a significant effect on Casimir's religious views, which will further distance the monarchy from the Protestant and Orthodox szlachta.
As you may have noticed from one of the earlier updates, the Ottomans have in fact invaded Hungary once again in 1558. You can see roughly how things are going for the Habsburgs with a quick glance at the map in the last update. The Jagiellons are on the verge of reconsidering their alliance with the Habsburgs in the face of Turkish aggression, but have offered assistance on multiple occasions since the invasion began (one of the reasons they could not more effectively deal with the conflicts in Livonia and Prussia).
Pmerania doesn't have even land border with East Prussia. If Barnim decided to take action against Order, he'll find himself under Imperial ban soon-Holy Roman Emperor also regarded TO as his vassals and existence of the Order was in Emperor's interest. Habsburgs supported Order against Poland until Grand Master Albrecht Hohenzollern converted to Lutheranism.
As shown in
this update, Barnim was Grandmaster of the Order before the deaths of his brother and nephew in 1530 - leaving him duke of Pomerania - and his conversion to Vinteran Protestantism, after which he secularized the order. His twin duchies have been under the protection of Denmark since the reign of Christian III (having married Christian III's sister, Dorothea), and his two biggest concerns - being the Habsburgs and the Jagiellons - posed little risk at the time due to the mounting discord in the HRE and the death of Sigismund I in 1532, which left a 12 year old Sigismund II on the throne. For the next 2 decades Charles V was in no position to intervene in Pomerania-Prussia due to the stresses of the 20 Years War, and Sigismund II was likewise unable to do much due to difficulties both domestic and foreign (his marriage to Barbara Radziwiłł, his involvement in the Schwarzkrieg, etc).
Second thing-Sejm under last Jagiellons was not te same as 17th century one. House of Envoys under Sigismund I and Sigismund II was reduced to weak institution, whose only role was to accept new taxes. Also, King often pushed his decisions against the will of envoys. Last Jagiellons ruled through Senate, which was smaller and easier to control (King had right to nominate senators while envoys were choosen by szlachta).
I did not know that, so that's interesting. However, the problems Sigismund II has encountered with the szlachta ITTL is not so much a matter of passing legislation as it is a simple animosity between the szlachta and the monarchy. Sigismund II - having all the caution characteristic of the Jagiellon kings - has gotten a good read on the situation and has therefore merely refrained from attempting any serious reforms or decrees that might exacerbate relations with the aristocracy.
What's the capital of German Empire ITTL?
If the Empire has a capital, it's technically Frankfurt on account of the emperors being elected (since 1356) and crowned there (since 1560, a dignity formerly reserved for Aachen). Emperor Philipp II has gravitated towards Frankfurt due to its convenient central location and historical significance(a habit his successors will accentuate), although Vienna is still where he spends most of his time, with the cities of Mechelen (where the Great Council of the Netherlands has convened since 1473), Prague, and Buda receiving a fair amount of attention as well.