I understand your reservations but I do not think that your analogy holds true...
We have no intention of "annexing" Iraq as Iraq did with Kuwait. The President has repeatedly stated, "regieme change" as our ultimate goal. He even issued terms for the Iraqi generals last night. Assuming this to be true, your analogy about "becoming the tyrant" does not hold. Additionally, I think if we "explain to the world community that this is a continuation/follow up to the '91 Gulf War" that most of the world community will be appeased - not that it really matters what the world community "thinks" at any given time, seeing as how they are merely a group of self-serving autonomous entities as well.
And cutting through any politically correct crap, the reason Hussein wants to develop these weapons is to use them against Iran and /or Israel. Either of these targets would completely destablize the region and the world oil markets and lead to an even larger conflict.
As per Pakistan, India will be more than happy to take care of any "problems" in that region. If you look at the history, the Muslim expanse stopped flat when it hit present day India to the east and China to the north. I don't think it would take too long for India to move it's troups up into Kashmir (first :-) ) and then into Pakistan given the opportunity of a "civil war". This is what is called a self correcting mechanism?