I can imagine a simple miscommunication getting out of hand. If both the Germans and Italians wanted control over Austria, and both sides attempted to invade, or at least take control of the local government, then they could meet in the middle with messy consequences. Hitler always viewed the Italians as inferior to the Germans, so if skirmishes did occur, he could quickly hold it up as the "Italian Betrayal". Meanwhile, Mussolini would think Austria part of his New Roman Empire, and would see the protestant northern Germans as traitors - possibly attempting to create a catholic south German vassal of Austria and Bavaria. The course of this war would depend heavily on the first couple of weeks - the Alps would be difficult to fight in, and could end up grinding to a halt. If either side could push through the mountains quickly, they would have the upper hand. Eventually, foreign powers would be forced to act - France especially would not want that kind of conflict almost on their doorstep. The question would be how France, and possibly Britain, would get involved. They might choose sides, or attempt to occupy Italy and Germany for peace-keeping purposes. With Italy and Germany tied up in a conflict, the Spanish Civil War would have gone differently - possibly with a Republican victory or stalemate.