Forming Roman Empire as unreformed pagan

Such a vast empire is bound to get split at some point, particularly after succession. You can either force it by causing.. an unfortunate incident, as Kyle suggested, or sowing dissent with a powerful king-level or powerful duke vassal of HRE who dislike their current liege.

Of note is that you can beat larger armies than yours with some clever warfare tactics. You are a pagan, and if the enemy hasn't researched Military Organization at least two or three times (unlikely, if you are that early in the game), then they suffer severe attrition in your territories. Also important is that hauling such large armies can take time, and would give you a few precious months of consolidating your troops and destroying some of their armies while they call their Occitan legions. Hopefully your realm is much more compact than theirs, and have ample naval access for quick transport on sea rather than by land.

If you deliver significant damage to them, factions within their empire might grow powerful enough to cause a civil war. This can give you a significant advantage and might cause them to ask for white peace to deal with troublesome vassals. This will give you some ten years of breathing room for you to expand and grow until they are able to strike again.

As you always have a casus belli against them, yielding some lands to them now without a fight might be a good longer-term strategy to reconquer them later when they are embroiled in another conflict -- particularly if you don't hold any of the counties in the duchy.

Taking away all county level holdings of the current owner will not work, since he will just claim some from his vassals. You need to take over Every Single Territory owned by him, without taking the title. Once the title does not have any counties under it, directly OR indirectly, it should be destroyed and will allow you to create the latin empire.

Here is one source describing this http://www.reddit.com/r/CrusaderKings/comments/1azgns/how_to_destroy_the_byzantine_empire/

Unfortunately, this does require a series of wars against what is probably the most powerful empire in the game.

It's also possible to do this using the console commands listed here: http://ckiiwiki.com/Console_commands