Chiming in rather late here as I have just discovered this thread:
Um, first of all will this very "WI" thread be the location of the timeline/story or will you start a new one elsewhere? I guess I should subscribe to this thread anyway but if you launch a new one, please announce it here (or in your signature).
About alt-Shuttles; reflecting on the two actual OTL disasters and on most likely alternative ones considered thus far, the solution of an ejectable capsule seems like not only the only one that can cover most known abort contingencies, but it's not a bad solution for most of them, even the ones where an ejection seat system might do the job too. Of course if a capsule, or pair of capsules, big enough for a crew of 8 is blown away the Orbiter itself will be totalled, but that's probably the outcome of any other crisis serious enough to warrant abandoning ship.
Just how severely costly, in terms of penalties on normal operations, does a crew capsule have to be?
Most of the proposals I've seen have been rather elaborate, a "Shuttle on a Shuttle" as Uli puts it.
Whereas, I'm looking at the nose cose of the OTL Shuttle layout, and wondering, "Why not put a Big Apollo CM there?"
By Big Apollo I mean by analogy with Big Gemini of course--expand the basic conical capsule to allow room for as many extra spacesuited people as you want to send up--just enough room for them to be able to scramble into the capsule in an on-orbit emergency and get quickly strapped in to their acceleration couches. I'm guessing, what, 2 cubic meters per astronaut, so a 16 cubic meter cone segment can do the job? Allowing extra volume for the outer shell of it we might be talking about a 5 meter tall by 5 meter diameter conical capsule.
Also like Big Gemini, after launch, the heat shield for the survival/command capsule itself has a hatch that opens into another habitable volume. This volume would have no human beings riding up or down in it, but it expands the living/working space for our maximum crew of 8 so they can operate in the Orbiter for weeks and leads, as per this thread and per OTL reality, to an airlock to the cargo bay where optionally we can put yet more habitable living/work space.
During launch, the whole crew is crammed in tight into the single capsule on the very nose of the Orbiter. Now given the OTL parallel design that's kind of awkward for safe ejection since the eject has to be canted to veer well away from the fuel tank, which is after all the main source of danger.
I've been lately charmed with the NASA late-80s early 90s "rescue shuttle" HL-20/38 design, in turn largely derived from the Soviet "Sapot" MiG-105 component of their proprosed "Spiral" system. It looks kind of piggy and in an ASB thread I proposed naming military ships based on the design "Javelinas."

("Javelina" is a Mexican/US Southwest Latino dialect term for the boar-like animal more often known in English as the "peccary.")
Well, to my eye, the rather bulbous nose of the HL-20 layout looks rather like a Soyuz-type "headlight" reentry capsule, and those things, I'm told, are about the most efficient shape to enclose a given habitable volume for reentry. Except that the axis of the capsule I can imagine buried conformally in that nose bulb would be canted a fair number of degrees away from the launch axis.
So, canting such a shape, or even a more or less standard American type cone, might work quite well with the aerodynamics of a larger spaceplane.
One obvious question would be, would such a capsule represent a great weight penalty? Well, one possible design lineage of an STS system, already foregone here, would be to start with a winged spaceplane designed around a nearly standard (except for the heatshield hatch) Apollo or Gemini capsule, developing a rather conservative cylindrical body back from it and adding in as much delta wing as needed. Another way to look at such an early prototype Orbiter would be to consider it as a reusable MOL with wings.
In such a system, would the command/ascent/descent/survival capsule really be a disproportionate amount of mass? Consider that the control systems would be located there in any case; as we grow it from the 2-3 meter dimensions of a 2-3 man capsule (the Apollo version already being fairly large for just 3, it had to serve the crew of Apollo 8 for all their living space during their orbit around the Moon after all) to the 5 meter or so dimensions of a capsule suitable for 8 people, that the controls still mass much the same; the mass of the capsule goes up I'd think pretty much as the area of the outside surface, plus of course the added mass of 5-6 more astronauts.
Of course an ejectable survival capsule would have its own (one-shot, presumably ablative) reentry TPS, and require some combination of parachutes and/or landing rockets a la Soyuz, as well as emergency survival equipment and supplies for its complement; this is clearly all additional mass (except maybe some of the survival supplies, if STS ever seriously envisioned surviving a forced landing someplace where NASA or the US military couldn't come get them within half a day or so).
Another problem I can foresee, I guess there are reasons that crew did not occupy the nose of the STS and weren't meant to go in the nose of the HL-20 nor the Spiral. Presumably the nose bears the brunt of much reentry heat, and is a preferred location to put the kinds of things that normally go in airplane noses, like radars. But I'd think the thermal issues in a normal reentry would be manageable (and in a launch still more so).
A very serious issue is, what is the nature of the escape launch system? On Apollo it was an external escape tower. (Gemini dispensed with that and relied on ejection seats for the two astronauts). The escape tower was only meant for emergencies in the first phases of launch, when the mostly unburned propellent threatened a really big explosion in dense near-sea-level air. Once the tower was ejected, an Apollo crew could escape a later catastrophic failure of the second or third stages by blasting away on the Service Module. (I would guess the Gemini transstage offered a similar capability). So, Apollo actually had two escape rocket systems.
Can we consolidate them into one? A fully storable, standby version that ideally will be returned unused and ready for another use for years to come, over dozens of missions?
It's hard for me to see just where to put it on a basically cylindrical/box design like the OTL STS. We don't want it in a tower in front because we'd have to eject it once launch was safely accomplished, whereas we might need it badly to escape a failure of the main TPS in a failing reentry. Again the HL-20 layout rather suggests interesting solutions; the bulbous nose, where I suggest putting the crew survival capsule, is flanked by thick strakes that flow into the wing/body. A pair of powerful liquid fuel engines there might serve well while being well protected from normal reentry heat. We could simply put the fuel and engines just aft of the capsule, leaving only a narrow corridor for crew to crawl past them to the aft hab/lab area, but that gives me the creeps; basically I'd be proposing everyone live and work around a great big bomb! (Of course putting them off to sides might not help much in reality.

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Anyway, clearly in addition to whatever extra mass making the nose cone of an Orbiter into a survival capsule might entail, the mass of the escape system engine(s) and fuel is clearly more such dead weight on a normal, accident free mission. And if we can't cleverly sequester it away from the crew, poses a brand-new hazard of its own. Conventional wisdom would hold that only the hydrazine-based "storable" acid propellants would serve, if we want to keep this stuff handy all the way through a mission that might last a month, and I might be forced to bow to conventional wisdom here since the obvious alternatives involve either liquid oxygen, or alternative storable oxidants that pose their own threats like hydrogen peroxide. But those "storables," which were ubiquitous in the Soviet/Russian and American programs alike (STS used it for the OMS for instance, and Apollo for the SM and LEM engines, while Gemini launched on an entire rocket mostly made of the stuff) are chemically very nasty. Still they seem likely candidates for the job, alternatively solid fuel rockets designed to give the capsule a standard hard shove with no adjustment possible, whether that shove is completely needed or not.
Oh well, the Dragon capsule e of pi suggested might serve above certainly has to enclose fuels of such power in close proximity to its crew too.
Such a simple, straightforward capsule system would clearly compromise the performance of routine, safe missions to some degree. But on the other hand if STS had been designed in this way, I see little reason to doubt the crews of both Challenger and Columbia would have escaped the wreck of their spacecraft intact and alive.
If such a design might be considered in this timeline, I suggest it might also lend itself, in a rather different fashion, to your vision of a two-crew versus eight-crew variation. A minimal command/survival capsule could accommodate the minimum pilot/copilot 2 person crew at a considerable mass savings versus an 8 person version; it would also be quite compact and much of the volume normally taken by the lower part of the bigger version could become the expanded orbital habitat/workspace for the 2 astronaut crew, freeing up the segement behind it for more cargo. Indeed, if the basic spaceplane structure can be designed to have different modules installed for different missions, then the same airframe can alternatively be a minimal crew of minimal duration, maximum cargo truck; or a minimal crew, maximum endurace/capability mini-space station (a la MOL), or full crew, short endurance, pretty big cargo (full sized emergency survival capsule, minimal habitability extension) version for quick shuttling to an established space station, or finally fairly long endurance, maximally manned version where most or all cargo space goes to mission modules.
And of course that same airframe could then be gutted of all of this stuff with a mere filler shell put in to occupy all the potentially habitable volume, and flown unmanned with maximum cargo capability. And then the next mission go right back to carrying people, by twos or by eights.