I'd just get rid of all the set up to Sasuke and Itachi (you know his fight against Deidara and getting his team, compress everything in that arc to 5 chapters and maybe add a flashback chapter for each of Sasuke's team to character build, get rid of his fight with Deidara completely have Deidara instead getting killed by a Jinchuuriki he was attempting to capture or something, or even just have him killed in the war). Have an epic fight Sasuke and Itachi (think they're canon fight is good enough, it can be improved but I can't think of a way).
I like Nagato's character too much to have him be the final big bad, but I'd rather have him do his own things rather than differ judgement to Madara. He's following his own plans to world peace, they just involve the bijuu (something that Madara wants), which is why they're working together.
Madara is insane. He has a split personality that he isn't able to keep control of at times (his Tobi persona isn't an act), and he really believes the moon's the Juubi's body (it isn't, when the Juubi was broken up to all the bijuu it died and can't be reformed, the Six Path Sage made sure of it). About half of what he said to Sasuke was true (Itachi really is a patriot and did kill his family on the villages orders, but he really thought them as fallen and weak, and thought that if he could kill all of them in one night then they deserved to die (except his mom who stepped in front of his dad, his only regret and the reason why he's crying)). Danzou led the charge of getting all the Uchiha killed (he wanted the Uchiha's eyes to control Naruto, his canon reasons) with Sarutobi's two teammates agreeing but reluctant to go that far (Danzou pulled the trigger way too early, there was probably a year or so before things got to the point of civil war, and he did it behind Sarutobi's back). Sarutobi nearly killed him for that, except he couldn't come up with a reasonable enough excuse to do so without airing all the dirty laundry about the village's involvement, so he marginalizes and makes sure Root is gone (in the three year time-skip Danzou regains all the power he lost).
Instead of the Sasuke arc before his fight with Itachi, we get character sketches of Yugito and Roushi. It starts with what they are doing before their fights with Akatsuki, in the middle of the fights we get a couple chapters of flashback of their lives, and then they get caught and die in the extraction. Each lasts 5-7 chapters interspersed with Naruto working on the Rasenshuriken (Yugito), or the Immortality twins arc (Roushi).
Naruto doesn't gain any of the pussiness that he gets during the Kage arc (instead he makes a deal with the Raikage, whoever gets to Sasuke first gets to decide his fate, but he asks the Raikage to reconsider just outright killing Sasuke). He doesn't get a whole lot of jutsus, just a few of Jiraiya's toad based ones, his swamp one, and he worked on his wind training on the road instead of first hearing of it right before the rasenshuriken training.
Really other than a drop in the Sasuke centric arcs and nerfing his abilities (rather not be able for him to get the Mangekyo). He's as adept with lightning and fire as any is, and overall he's equal to Naruto. (he has an edge in speed, put Naruto has an edge in power, he's still able to suppress the Kyuubi (along with Madara), but he can't disrupt Naruto's sage mode), I'm fine with pretty much all of Naruto's arcs (just change up the fights a bit).
Bullet Tooth Tony: You should never underestimate the predictability of stupidity.
Reporter on Titan Maximum: Sasha is there any connection between your poor album sales and the fact that it sucked?