First thing first: I'm not going to say it's the best quest ever. Nor will I say that Bethesda must include this in the game as a DLC (Especially since they're already done with Skyrim completely.). It's just an interesting (Well in my opinion at least.) that includes choices and consequences; something the game kinda lacks.

Now the quest itself would tie into the Main Quest. When warning Jarl Balgruuf of what happened at Helgen, he responds by sending some of his soldiers to Riverwood. His steward, Proventus, warned him that Falkreath could mistake this as a sign of aggression. Turns out Proventus was right. Shortly after warning the Jarl, you will receive a letter from Proventus asking you to come back to Dragonsreach. When doing so, Jarl Balgruuf will then admit to his steward he was right. Jarl Siddgeir had sent troops of his own near Whiterun's border. And so with you being one of the few surviving eye witnesses at Helgen, Jarl Ballin sends you to Falkreath to convince Jarl Siddgeir of the real reason of Balgruuf's recent actions (Hint: Dragons.) Of course, you also have the honorable duty of giving the garrison at Riverwood some more supplies first.

When arriving at Riverwood, you will see that it became more of a military camp than a village. (The game just had three guards stationed there, but for the purpose of the quest, there's now the same amount of soldiers as seen in Imperial and Stormcloak camps plus the villagers.) When you meet the commander of the garrison, you'll have the supplies removed from the inventory. But there seems to be a problem. Not only is there a encampment of nearly hostile Falkreath soldiers, (Which is south of Riverwood and close.) but there's also an encampment of soldiers from the Rift nearby too on Riften's border. Combine this with the threat of dragons, the local area has become a powder keg of violence. This gives you some options.

A: Report back to Whiterun and tell Jarl Balgruuf the situation. The Main Quest will continue as normal. However, the next time you returned to Riverwood, you will see it in ruins much like Helgen. Alvor, the only survivor, will explain that Falkreath's soldiers attacked Riverewood, burning it to the ground and killing almost everyone, after taking heavy losses from the men of Whiterun. Shortly after, they were attacked by the Rift's troops, and after a long bloody battle, the men of Falkreath lost. However, The Rift's victory was short lived as a dragon came out of nowhere and attacked them. Few survived that day, leaving the three holds (Especially Riften and Falkreath, as they had the bulk of their forces assembled in the battle.) weakened. Alvor only survived because he managed to escape during the bloodshed and hide in the nearby forrest.

B: Convince the Whiterun forces to withdraw and return to Whiterun. This part would be tricky to do, as the commander of the army was given orders form the Jarl himself to defend Riverwood. You would need a high speech skill and to choose carefully in a debate with many dialogue options. If you succeed, The Whiterun soldiers will head back to the city. In response, The Falkreath forces will focus their attention on the Rift army, causing them to stand down. This continues the tense stalemate going on in the Civil. However, you theoretically risk Riverwood of not surviving a dragon attack. And you may even piss of Jarl Balgruuf.

C: Convince the Falkreath army to stand down. To do this, you must head to their camp to speak to the commander, who is one of the jarldom's thanes. When arriving to the camp, you will be greeted not so pleasantly by the thane's troops. (You're coming from the north are you?) You will have to convince the Thane you're no threat, which will play out like how to convince the Whiterun commander to withdraw. If you fail, well, you'll be attacked by the soldiers. You can lure them North to Riverwood where you'll cause a battle between them and the Whiterun army. Whoever wins will deal with the Rift. If Falkreath won, it will result in the increased presence of both Imperial Legion and Falkreath presence in the Rift. If the Rift wins, it will result in the increased presence of both Stormcloak and Riften soldiers in Falkreath. Whiterun will be facing increased hostilities by both the Stormcloaks and the Empire. And Riverwood will be endangered by dragon attacks in both cased. However, if Whiterun wins, Riverwood will be more secured, and the other two sides would be unable to continue any action to each other's territory, thus resuming the stalemate.

However, if you convinced the Thane to not attack, he will explain that Jarl Siddgeir believes what happened at Helgen was the result of a Stormcloak raid, and that Balgruuf has secretly joined the Stormcloaks, explaining the presence of his soldiers near the border. Jarl Siddgeir fears an invasion from both Riften and Whiterun. To convince the Thane to stand down, you must do the persuasion mini game mentioned above. However, you can try to use your experience at Helgen. If you can convince the Thane that dragons caused Helgen's destruction, and that Whiterun does not intend to invade Falkreath, the Thane will then focus his attention on the Rift's army. The commander of that army then stands down as well. You've avoided a bloody battle.

D: Slip past the Falkreath camp to the city itself. And talk to Jark Siddgeir himself about the situation. By telling him Jarl Ballgruuf sent you, he instantly demands you to be arrested. You can of course, convince him otherwise. If you don't you will be thrown and jail and fail the quest. If you do, he explain the same thing his Thane near Riverwood said. To convince him that it was dragons that destroyed Helgen, you need to do that mini-mini game mentioned above, and use who you escaped with as help. If Hadvar helped you, Jarl Siddgeir will be more willing to withdraw and focus on the Rift. However, if Ralof helped you, and you mentioned that to the Jarl, he will suspect that you are a Stormcloak and will you arrested. You failed the quest whether you escaped or not. Succeeding in persuading the Jarl will result in the similar result as option C

E: Slip past the Falkreath camp to the Rift Camp. This is rather straightfoward. By approaching the camp, the soldiers (Led by another Thane.) will be cautious but more friendly than the folks at Falkreath. However, you cannot convince the Thane to withdraw. As he is under direct orders form Jarl Laila Law-Giver to invade Falkreath, and unlike the other commanders, he's more stubborn about it. Thus you have to...

F: Convonce Laila Law-Giver to Withdraw. This works a lot like with Jarl Siddgeir. Except she doesn't try to arrest when saying you're Ballgruuf's emissary. To get her to stand down. You must convince her that there are dragons, and that's a more important issue than Falkreath. With a high enough speech, she will reduce the amount of soldiers at the border and will focus on protecting the hold from dragons. Much to Ulfric's annoyance. However, if you fail to do so, you must resort to other options.

G: Convince the Whiterun commander to attack the Falkreath or Rift camp. By convincing the commander that Falkreath is bound to attack anyways and you could give them a good surprise, the Commander will reluctantly do it to secure the border. However, when you destroyed the Falkreath army, you will be greeted by the Riften army. Eventually the Whiterun army will (barely) fend them off. With the two other armies gone, the Whiterun commander can resume his initial role of protecting the Riverwood population from dragon attacks. Of course, you can even get the commander to attack the Riften camp first. By doing this, you will witnessed that the Falkreath has already done this first. Getting sandwiched by two sided, the Rift soldiers were quickly finished off. By doing the first choice, you weakened both Falkreath's and Riften's forces, and secured Riverwood. However, Whiterun's relations with both the Empire and the Stormcloaks has worsened. Doing the second option, (Which is harder to get the commander to do.) You would managed to increase relations with Falkreath while having Whiterun forces in Riverwood. (You did showed them that Whiterun hasn't side up with the Stormcoaks.) But relations with the Stormcloaks and Whiterun has gotten worse. And you also increased Imperial and Falkreath presence in the Rift.

H: If you prefer to get in The Imperials' good side, then you can side up with Team Falkreath. While the Thane-Commander has been given orders to get rid of the Whiterun forces, he is cautious about doing as he (correctly) fears the Riften army will just sweep in after he is done assaulting him. By convincing him he could surprise the Rift's forces by attacking them first, (As they most likely are expecting the Falkreath army to attack the Whiterun army, not them.) you can convince him otherwise. When attacking the Riften camp, they are caught by surprise. When defeating them, the Falkreath Thane then used what's left of his army and attacked Riverwood. When you defeat the Whiterun army, you did betrayed Balgruuf. You've also pissed off the Stormcloaks too. And you left Riverwood's population more vulnerable. However, you increased Imperial presence in the Rift and made a good impression on the Empire.

I: The last choice. Side up with Team Riften. By doing this, the Thane-Commander was already getting on his way to start the battle. His plan was simple. He will have you lure either the White run or Falkreath forces to vice versa, and the Rift's army will finish what's left. Whether you "side" with Whiterun or Falkreath in the initial battle, you will then switch side to Team Riften in the second fight. The winning side, being tired, will lose to the Rift's army. By doing this, you made Riverwood vulnerable, you betrayed and pissed Ballgruuf off, and you pissed the Empire off. However, you increased Stormcloak presence in Falkreath, and made a good impression on them too.

So that's the basic idea of the quest. Do you like it? Pros and Cons? And if it was in the game, which option would you choose?

"The Main Quest will continue as normal. However, the next time you returned to Riverwood, you will see it in ruins much like Helgen. Alvor, the only survivor ..."

Nitpick: but that means you'll have to change something in Main Quest, too... Seriously though, why Riverwood massacre? I think you could improve on this quest and avoid killing off people in Riverwood at the same time.

Nitpick to your nitpicking: I guess I meant to say as normal as possible. Anyways, when I thought of this, I was thinking of choices and consequences. Skyrim as a game had little of it. And to me, having Riverwood destroyed is a very clear consequence. And having people killed presents a grim reality in war. One I wish the game portrayed more accurately. Now, I will admit that there are some things I could approve on, or things I rushed while writing and therefore kinda flawed. But what ideas you think could make this idea better?

Edit: I also forgot to

That depends whether your goal is a quest for a table-top version of Skyrim rpg campaign, or a potential quest mod for the Skyrim computer game. In the latter case, unless you consider a larger overhaul, you'd better preserve boundary constraints of the story, such as

which is yet another reason to plot this quest differently. One way to do that could be

What else is premised, grim realities of war and whatnot, and how the plot unfolds, it's up to you.

(the difference between table-top conversion and a quest mod is first and foremost to me, because I've been dabbling in both. 1) For table-top, I wrapped the beginning of Skyrim campaign as a sort of new-wave rpg game, with players thrown in a one-shot adventure of "who dares out to be the dragonborn?" - and I patched the obvious plotholes and extended some quests with choices-and-consequences, simply. 2) For a quest mod, I want to add some puzzles to the game, and back them up by interesting plot hook-line-sinkers, true to the constraints of the original story-as-told. So, dance of three jarls, rings a bell a little...)

I see what you are saying. Bringing up Whiterun's neutrality and how they seems to break out of that is a good point. Though I guess I could either write like that given the circumstances, the Whiterun forces had to attack the other two as they were starting to become too much of a threat. Though perhaps there could be a scene where Balgruuf gets irritated that his men made contact with Imperial and Stormcloaks loyal forces. Maybe there could be another quest where you need to help repair Whiterun's relations with the other two holds.

The bit with the Falkreath commander is a good idea. And if I were to add this quest in a mod (Which is unlikely because I have no experience with the Creation Kit.)

And with the name of the quest, do you like it or not?

the name sounds ok, it rhymes with 'Charles Dance of Three Jarls'

The quest idea does sound interesting if a little convoluted in places ... but my only real reason for commenting is to point out that I love Balgruuf's new nickname.