So what should I do to get it back on track?
Maybe you could reload your game as Germany and ban Austria, Hungary and their puppets from Mitteleuropa? If you do this before Ausgleich event chain, you can have normal negotiations. If events were already fired, I'm afraid there's not much to do now. But if you still have saved game before Austrian-Hungarian negotiations, play as Austria but don't join Mitteleuropa before you settle things in monarchy(anexations, centralisation...).