Well, I think that had Hitler been blown sky high then there would of been a power struggle in his lew. However I belive it unlikely that the Nazi party would of retained power. After all we know there was a considerable movement amongst the armed forces and subsidiary government that would of had to be over come first.
As for the allies reaction, well I think a conditional peace may of been an attractive proposition. The USA had its hands full in the pacific, and also understood that in the vacuum of Nazi Germany, the USSR would probably fill the gap. Why not forgoe sending thousands of troops to their deaths when convincing victory could be attained without further conflict? Provided a return to pre invasion of poland boundaries I think most could of accepted that, perhaps with further reparations. By 43 the USSR was starting to get scary, why not nip it in the bud?