Yeah, this is why I tend to break free of vassalage (or start without a liege) ASAP. Because the AI is prone to running lengthy, expensive wars and bankrupting his loyal servants. This is one reason why the Holy Roman Empire tends to be a clusterf**k under AI control.
So far, my three most successful starts have been the Principality of Smolensk, the Duchy of Apulia and the Duchy of Aquitaine, all in 1066.
Smolensk has a decent chunk of land, and easy access to the pagan tribes in Prussia and the Baltics. With a little finagling, I forged the Kingdom of Lithuania, at which point a horde of Russian princes (most of whom were cousins of one stripe or another) came rushing to pledge themselves to me. By 1399, when I went to export to EU, the Holy Orthodox Empire stretched from the borders of central Europe to the Urals, and from Lappland to the Persian Gulf and the source of the Nile. And I had kicked the Golden Horde's ass twice as soon as they appeared.
Apulia gives you Robert Guiscard, the famous Norman conqueror of Sicily. And I pretty much followed his model -- conquer Sicily, found a kingdom, consolidate southern Italy and create a mix of Arab and Norman cultures in the court. Of course, in my case his descendants went on to conquer northern Africa from Marrakesh to Alexandria.
Aquitaine was an attempt in DVIP to refound Aquitania as an independent realm. Not only did I succeed in that, but eventually added all the Iberian kingdoms and the crowns of France and Burgundy to my list, eventually earning the title of Emperor. The Aquitanian Empire currently has some succession problems, but my eventual goal is to re-establish at least the boundaries of the Frankish Empire under Charlemagne. Oh, and to make Occitan the primary culture of Western Europe.
Now...why would you ever consider NOT getting this game?