There was a topic just like this one a couple days ago. You might want to take a look at it:
http://forum.paradoxplaza.com/forum/showthread.php?749713-1.4-Byzantium-or-quot-Frustration-management-quot
Basically, you want to ally with strong nations. Like Austria, Poland and/or Lithuania. The Albania start still works, all you gotta do is accept to release Albania and Greece to peace out Otto. Vassalize Serbia, Bosnia and Wallachia. Build 20+ galleys. Get your cores back from Venice. When in war with Otto you, use the galleys to force them to take the long way around the Black Sea. There's 2 options from there:
1- Otto will meet your allies in Lithuania and Poland, making them fight there while you take all their provinces.
2- Otto will go straight to you. In this case, all you have to do is cross the sea. They might take your provinces, but you have a free chance to take anatolia. Leaving Otto to face your allies in the balkans.