Voice it. Though I don't know about coming right back, it never hurts to hear other peoples ideas.
It's basically Storyteller's depiction of how things end up, except the Knights and Confederation are more proactive instead of sitting where they are to get killed. For example, calling reinforcements from Rihad and Roseguard to help surround and overwhelm Stros' army during the weeks that it'll take for Haroun to mobilize his armies to break past the Irk Bridge. Half of Commander Vario's knights will be sent to Terentius, in hopes that Haroun will prioritize attacking them instead of the Confederation (this was actually an idea I've had before we decided while the RP was going on). It doesn't work.
The siege of Taneth lasts quite a while, and at some point Battlespire issues new orders: because peace cannot be reached, they must eliminate the invasion leaders Haroun and Bomilkar, in hopes it will stop the invasion (as well as destabilize the Yokudan Empire, thus making it a more tempting target for the Aldmeri Dominion to lessen the threat to Cyrodiil). One of the assassinations succeeds, but the other fails, thus implicating Battlespire. The Yokudans become even more determined to break into the city and they manage to breach the walls. The Knights hold the line so Lucretia's mercs and political refugees can escape. Commander Vario and everyone remaining in his command is killed, and Commander Terentius takes the rest of the Knights, mercs, and refugees and leaves through the mountains, marching through neutral territory before entering County Chorrol. Without them, the remaining armies of Roseguard and Rihad are crushed without nearly as much difficulty.
After conquering Skaven, the rift between Crowns and Forbears, mixed with the loss of either Haroun or Bomilkar, results in infighting across the Empire. The remaining leaders manage to hold the Empire and its new holdings together, but it takes all of the Empire's might to do so, thus ruining any prospects of expanding its borders further any time soon.
The Knights return to their Cyrodiilic chapters, Battlespire's actions are brought to the Elder Council's attention (both taking Cyrodiil's diplomatic matters into their own hands and then ruining it by carrying out assassinations), although the rulers of Cyrodiil are either unwilling or unable to punish them for it. The battlemage aristocracy secretly commends Battlespire for defying an ineffectual government to get results, while the non-magical nobility view them (probably correctly) as potentially dangerous usurpers.
Commander Vario returns as a sanctified spirit in the Priory Undercroft, furious at both the Yokudans' butchery and the numerous problems plaguing the Order (the latter of which he was made aware of post-mortem). He is allowed back in the Order and dedicates himself to scouring the Order of corruption (starting with the Ordo Hereticus).
Anything else would be as Story said.
And as I said, I'm well aware it will not be accepted.