Good advice, Scook, I may try that next time. However; you all but guarantee the loss of Egypt with your strategy, which is arguably worse than Spain going axis (you lose the convoy from Egypt, and get no extra American ships). This would also free up Italian units to go to Russia (or help pull a "Rambo" and headcrack Spain. I don't see how you can hold England without building units. Two German airborne, and amphibs that can move and land in one turn, makes it pretty dicey. Using the RAF to hit ports to preclude invasion is a questionable strategy due to the more powerful German air. With German air superiority, 3 subs, and, if you wait awile, 3 cruisers and the Bismark, the sea battle just may cripple the English navy. But as you said, this is off the point.
One fix I would consider would be to allow the USA to invest in Diplomacy early. Just because they were neutral, does not mean that they weren't active diplomatically.