How many of you would like the Neutrals to play as full on major civilizations ala FE/Civ/etc that are trying to also ascend, conquer each other, etc.
Versus how many of you prefer to keep the rivalry between you and the SK?
That is a tough call. Unless you still have some way of still trying to get them to ally with you (or the SK get them to ally with him), I'd prefer it to stay the way it is. So instead of say them being 3rd tier like they are now - assuming SK is 1st Tier, Our player is 2nd tier, perhaps make them Tier 2.5.
I have no idea on how to accomplish this, but if you just make them able to play the same game as us and the SK, this will just be a 4x game, without the asymmetry. Maybe that would be fine. But instead of having Neutrals play as full civs, maybe have 1 or 2 of the factions you aren't using play as full Civs, and the Neutrals could stay Neutral, but be possibly recruited by any "full" player.
Everything else sounds great!