Well, I always delete all their buildings and starting units in descr strat, remove their starting money and reduce their kings purse to 10 or something like that. Sometimes I also add some crippling traits to the pope to make sure he never really gets anything done.
At least not during the first few turns and until the crappy pope dies and a new one is elected, all neighbouring states tend to be strong enough to withstand an attack.
You could also increase the costs and/or reduce the stats of all units the papal states can build exclusively (like papal guard and stuff)