You're assuming that the US public (60% of whom claim to have some German ancestry) would have no qualms about obliterating Germany with atomic bombs and contaminating the rest of Europe in the process. I think you need a reality check.
Absent Soviet involvement in the war, it is more likely that Germany accepts some sort of peace after Hitler dies, generously retreating from most of France and some other parts of Europe (pledging to retreat from Poland as soon as the Soviets do) in return for return to normal shipping.
No, the likely result is an intensification of the air campaign against England, and increased resources in the Mediterranean, following a successful campaign against the Soviet Union. The air campaign would not defeat Britain, as Britain actually outproduced the Germans in total number of fighters built in the war, as well as in pilot production. The Mediterranean strategy MIGHT have been moderately successful, except for the fact that by that time, the US and Britain would already have taken North Africa, Sicily, and be well ensconced on the Italian peninsula. The Germans could most probably push the Allies out of Italy, but would not be able to retake Sicily or Sardinia, much less North Africa or the Middle East.
At this point, vastly expanding Allied air power continues to bomb Germany. The Battle of the Atlantic is fought and won as per history. Churchill probably gets his way, and is able to convince the Americans to undertake an invasion of Norway, and possibly some sort of expedition in the Balkans. The Norwegian expedition would likely be successful, while any Balkans campaign (other than an invasion of Rhodes and the Aegean islands) would be ultimately unsustainable. I think the Allies would slowly gain air superiority over Gemany, due to the superiority of the P-51, and the introduction of the B-29 into the ETO. German high altitude fighters, and even jet fighers, would inflict heavy losses, but even a Germany that had conquered all of Europe and the Soviet Union would have been quite unable to outproduce the US and the British Empire (or, for that matter, the US by itself). Also, the Allies would have been forced to station large ground forces in the Middle East, to secure against an invasion through the Caucasus.
By August of 1945, the US has a choice - they can either drop two atomic bombs and hope to end the war, OR they can wait until there is an overwhelming number of A-bombs in the inventory (call it mid 1946-early 1947), and drop all at once. In the first scenario, if the Allies are able to take out Hitler, I think it's likely that a military coup would take place, and there would be some sort of surrender. If they don't take out Hitler, the war continues, and the Germans start using chemical and biological weapons against Great Britain and other targets of opportunity, including targets in the United States (the odd U-boat or two would certainly be able to slip through). I don't think this would be worth the gamble, so I personally think the smart decision would have been to go with the second option. In that case, Germany would simply be wiped off the map, without a word of protest from the US civilian population (and if you don't believe me, ask your grandfather or visit a VFW hall).
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