I realize that A.J.P. Taylor had his own biases and sought to prove certain points, but nonetheless I found his arguments in The Habsburg Monarchy, 1809-1918 compelling that the structural crisis of the Austrian Empire was beyond salvation, and that this became evident as early as the 1848 revolutions. Essentially, because Hungary was disproportionately represented in the military, any attempt at reducing the power of the Hungarian landed nobles would have resulted in an armed uprising and civil war. I do believe that the Hungarians would have lost the war, because no one else in the empire liked them (with good reason, obviously). Even so, the war would have destroyed the empire it would have been fought to save. There was one brief point in time where the nobles were weakened after 1848 and a strong hand might have been able to shrink the power of Hungary, but even so the problems of Nineteenth Century nationalism were creating a situation where overlapping claims to the same land by several ethnic groups (in almost all cases, the Hungarians and someone else, with the end result that the Hungarians suppressed the culture of the other group) was going to lead to one explosion or another.

It's a tragedy at a number of levels, because Austria was one of the most diverse and cultured states in Europe. My entire paternal line comes from the Austrian Empire and I've always been fascinated by it.