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Please excuse any redundancy on my part if this sort of situation has been fully discussed before. I find myself with not enough free time to actually play, much less peruse the forums in any depth.
Situation: Started the campaign from the southwest U.S. as Dallas. After building my economy, pampering my proletariat through an election (40%+ victory), and in general being a good little Leader ( I even made allies out of central Texas after they attacked and then agreed to a ceasefire) ; I found my unification vote poll numbers slipping towards the bottom of the barrel. No worries, I set about to get the votes I needed at gunpoint.
With less than six months left I stacked an invasion force along Houston's border, no reaction. Boycotted them, same deal. Offered them some beads and trinkets for their whole fiefdom. I even insulted their mothers, and still no reaction. Frustrated, I adjusted my ROE and "accidentily" overflew them with an air patrol. (shoulda grounded that patrol along Oklahoma's border)
Anyway, to get to the point, Oklahoma and Houston declared war and my 90% WM approval disappeared as fast as my membership. That was not a problem, I tried to pull a fast one and it backfired. What I strained a muscle raising an eyebrow over was the declaration of war some few weeks later by my ally Central Texas upon SW Texas. Even after blatantly doing their best WWII Wermacht impression they were still comfortably snuggled in the bossom of the WM. What gives?
My best guess is they were not excommunicated because they were fulfilling their mutual defense treaty with me and declared war on my enemy as a convenient excuse. Still, one would think that if "scum" like me outraged the WM so greatly, then any partners in my crime would be in bad odor with the WM as well.
Any enlightenment would be greatly appreciated.

(LOL btw I won, it just makes for a trickier next phase when you start with the reputation of a Hitler or Pol Pot)

Woah, what version do you have? I want that feature!

Starting wars is kind of counter-intuitive - you mass up your border until they declare war for you because of the high Belli from all your armies on their border. Otherwise you invoke the wrath of the WM and other regions since you didn't have a high enough Belli to justify the declaration.
If you want to get a DoW, a major contributor is your build capacity - how many units you can build at once in your bases (air, land and sea). If you have the highest in the region, there's a nice, steady rise in Belli for all the other regions so you just pay to keep your non-targets low and keep your people happy to stay on the WM's good side. Add on some embargos so they know you mean business and you've done all you can (diplomatic threats unfortunately don't do anything except make you feel good as of this release).

As for the AI's DoW, they may have had a decent Belli so it was "justified" enough for the other regions/WM to not get too upset. The Belli may have been from your alliance or other factors (I don't sign alliances myself so I wouldn't know, but since you were the attacker I don't think a mutual defence pact would really apply anyways), but I'm pretty sure that they'd get a similar treatment if they started an "unprovoked" war.

Thanks for the reminder about relative Belli's between my ally and his victim, that had slipped my mind.
As for my end of the situation, I was doing all the "right" things, I just didn't have time to wait for the AI to get around to getting pissed off. Technically speaking though, THEY declared war upon me over an AWAC crossing into their airspace. I don't remember their belli towards me, but it could not have been much over 40%. I don't have a problem with the results, it just seemed a bit off that something as minor as a navigational error would draw more political ire than a blatant invasion. ( I seem to recall a U.S. spy plane being shot down over Russia at a point in history when both country's belli levels were pretty high.) No worries, I'll start pissing them off earlier in the future.
As for insulting their mothers, that might actually be a nice diplomatic function to add, a way to diplomatically tell an AI where they can shove it. I mean, if a country wants to build up belligerence between themselves and a neighbor in real life, they don't have to spend gobs of money and time situating an army across the border (etc. etc.). They simply instruct their ambassador (insert equivalent) to announce something that pisses the neighbor off. Example: The Iraqis could tomorrow announce in Al- Jazira that their scientific studies had revealed that all Iranians descended from pigs. About 30 minutes later they would have all the Iranian belli they could possibly hope for.
I'm not sure how problematic this would be to add to the game.

"Technically speaking" you invaded their sovereignty and were the aggressor. I think the way it's handled is just right. No human would accept such provoking action as their fault so I think it's quite right that the AI doesn't, or the game would actually be rather easily manipulatable in that regard.

Technically, not to hard. I'd guess the major issue would be in the possibility (nay, invitation) for exploitation - the AI doesn't show much restraint in its Declarations of War, so just pumping up the Belli like that would mean that you could have a war within a few weeks without any real preparation beforehand. This may not be so bad for the player, but the AI (as far as I know) doesn't check to see if his borders are beefed up before the DoW - it just does it. If you think wars are easy now...

Fair enough and point conceded... It is not like I have ever managed to finish out a scenario as a member of the WM...or even with anyone I'm not at war with for that matter, so why start worrying about it now?
It will make for an interesting challenge as far as storyline anyway. The WM and their plans to unify are kinda moot if they let someone keep growing outside their organisation. (this was the first level scenario of a campaign)
Has anyone encountered stiffer WM resistance in this situation? Sending my opponents more units to throw at me hasn't worked so far....so unless they send a couple dozen tank battalions with some air support, or start nuking my cities...

I don't know if the WM invades or anything since I try to stay on speaking terms, but I do know that they'll stop trading most stuff with you. This can be an especially large problem in maps that don't have all the resources you'll need or when you haven't reached a point of near self-sufficiency, so be sure to build up your resource stockpile or be ready to take someone else's really quickly.