Interesting post. But I am not sold on it yet. The French Army, alone, was indeed bigger than the German Army in 1938, but France was just finishing the building of the Maginot Line and its military mindset was wholly defensive. France sat through the Phoney War until it was attacked in 1940; I contend that it would have been even more inclined to sit out a Phoney War in 1938, especially as the concrete on its spectacularly passive barrier to the German threat was still drying. I cannot see the circumstances under which the USSR would have attacked Germany in 1938; they seem to have a much more step by step game plan... Finland, Baltic States, Poland. The British were ready for nothing in 1938 and needed until 1940 to be able to cobble together even the flimsy British Expeditionary Force which was quickly overrun, even on the defence-favouring semi-urban and bocage terrain of Belgium and north France. If you're looking to France and Britain to nip German ambitions in the bud in 1938, I just can't see it. I see the Allied brass breathing a sigh of relief when they saw Neville Chamberlain waving his piece of paper.
Of course the German generals didn't want to go to war as soon as 1938 but it does not mean that they would have lost it. I reckon that we can see from Allied actions and decisions in 1940 that they would have been beaten in a similar way in 1938, regardless of the fretting of some of Germany's generals. More pertinent perhaps is whether French generals thought they could beat Germany in 1938, 1939 or 1940.
Your point about the Czechoslovakian army and its fortified positions is very interesting but are we assuming that the hypothetical war that replaces the actual war that "Neville Chamberlain could have avoided" would have had the same sequence of conquests?