This is how I see alternate (and sadly more logical ) path for Italy in World War II:
1. World War II starts.
2. Italy declares neutrality
3. Italy sells to both parties. It is making great money on aluminium, steel, oil, etc etc. Italian ambassador in IIIreich sips champagne with ambassadors from Portugal, Turkey and Sweden. They all take turns swimming in gigantic pool of gold (Scrooge McDuck style)

4. Italy is not getting Dalmatia - NOBODY cares
5. France falls - Hitler tempts Italy with Corsica, Nice, etc etc - Italy will not be swayed.
6. Italy is still not getting Dalmatia - even less people care. Enormous (100K people) manifestation in Rome - people carry signs with "We don't have Dalmatia - I don't care", and "Where is Dalmatia anyway".
7. Hitler attacks Yugoslavia and creates Ustase Croatia - Italy cares even less.
8. Mussolini presents ultimatum to Greek government: Greece is NOT SUPPOSED to become Italian puppet state, and NOT ALLOW Italian soldiers on their land. However due to antiitalian sentiment in population Greek government has to reject ultimatum.
9. Greek military kidnaps random Italian and declares him proconsul general/local chief deputy.
10. Italy has to declare war on Greece(League of Nations has no idea how to resolve that issue). Both sides fly the same flag which complicates military operations. Both sides have very low morale and no hope of victory. After 2 weeks of chaos no one knows where are the Italian and Greek divisions (mostly in the taverns). Who is winning, is there anybody shooting anyway.
11. Italy is STILL NOT getting Dalmatia - at that point no one remembers about that anyway.
12. II world war ends in Allied victory: Germany had some Italian Oil, but lacked Italian manpower on eastern front. Allies land in Normandy anyway (they loose experience from naval landing in Sicily, and Southern Italy, but don't have to fight Africa corps in Libya - just in Tunisia - Tunisgrad still happens)
13. "Mein Fuhrer, why do we have to defend that Gott forsaken Tunisia?" "Because it looks good on the map!!!"
14. Mussolini squanders all that gold and USD on cr***. Also Italy has to keep Ethiopia under control.
15. Italy is like Spain, but Mussolini is older than Franco, so he dies in 60s - just in time for hippie uprising and economic miracle.
16. We can all go to Tripoli and Benghazi for vacations