Continuing my series attempting to reconstruct how Babylon 5 was originally (for certain values of original) "supposed to" go. More detailed explanation and Season 1 are here, although note that since that post I have acquired a copy of the treatment itself from an exceedingly gracious reader.
Known: The existence of a mole on the station is revealed. This is a point of divergence between the treatment (which takes into account the cast changes between pilot and series, but not any changes in the series itself) and JMS' comments on what would have happened if there were no cast changes.
If there were no cast changes, Laurel Takashima would have been revealed as "Control," the sleeper agent that Talia was revealed to be in Season 2. She would have departed much like Talia, and been replaced by Ivanova as second-in-command of the station. The treatment, however, is ambiguous about the identity of the mole, just that they are discovered. It also indicates that Catherine Sakai would have been "mind-raped" and lose all memory of Sinclair, devastating him and ending their relationship. This is stated to occur during the "third/fourth season bridge," along with Delenn and Sinclair starting to date.
Psy-Corps emerges as an increasingly powerful and shadowy organization, but there is still no mention of Psy-Cops.
The Shadows would attack the Narn homeworld during this season, appearing out of nowhere en masse to wipe out its defenses and then vanish, opening up an opportunity for the Centauri to come in behind them and take over. After some time trying to rally support on the station, G'Kar would go home to join the Narn Resistance, and be demoted from main cast to recurring character for the remainder of the third season and part of the fourth.
Finally, it would be revealed that the Vorlons have been manipulating the younger races throughout their history, but the Shadows' motivations are not yet addressed.
Speculation: Given the similarity of the "mind rape" to both the Talia and Anna Sheridan plotlines, it seems likely that Catherine Sakai would have turned out to be Control (like Talia) and the commander's loved one stolen and twisted into someone else by the Shadows and their allies (like Anna). However, had there been no cast changes, Laurel would have been the mole, while perhaps Carolyn Sykes would have disappeared on an expedition like Anna, only to return as a minion of the Shadows. Catherine as the mole is actually one of the few places where the ideas in the treatment seem likely to be better than what we got in the show.
The loss of G'Kar, on the other hand, seems like a clear case where the treatment depicts a notably worse show. There is no trace of his religious epiphany or slow turning away from his initial presentation as a pure warrior, no sign of his character's growth throughout the show, and that is a very sad loss.
Another loss: there is no sign of Earth's growing corruption or fascist turn, no Nightwatch, and no declaration of Babylon 5's independence; Psy-Corps is more of a shadowy puppeteer than a participant in what amounts to a fascist coup, and so there is no trace at this stage of the human characters have to weigh their loyalties against their principles. There is also no trace of "War Without End"--there was no past conflict with the Shadows and Sinclair is not the "reincarnation" of Valen, so no theft of B4 into the past. ("Babylon Squared" is not even mentioned until a lengthy parenthetical after the discussion of the end of season 3 and beginning of season 4--it's described as a season 1 episode, but not mentioned in the treatment of season 1.)
The willingness of the Shadows to openly attack the Narn in force is interesting. Admittedly, by Season 3 the Shadows were capable of fielding such fleets and had emerged into the open, but that was well after the fall of Narn. Their willingness to do it sooner suggests that they have greater resources and are less afraid of being exposed, which makes sense if the cycle of past wars never happened and the Shadows are therefore a long-standing and active enemy of the Vorlons, rather than just coming out of a long hibernation.
Continued in two weeks...