Will Pratt, you'll have to excuse all of us from harping on your players. I think that every single campaign journal of CotCT that I've ever read, and from the experiences in my own game, the PC's universally have a long, deep hatred against the queen and her minions. So much in fact that joining her would be unthinkable.
That being said, this seems like a cool turn of events for your game. Run with it!
As far as what should happen next? It all depends on what you think would be a satisfying ending to your long campaign. If you're pretty sure they want to go all the way in helping the queen, here's my take.
The rebels have not been idle. Sabina Merrin has killed Zarmangaroff and defected. Later she leads a group of rebels to Longacre Building and frees a huge contingent of Grey Maiden recruits who are not loyal to the queen. Blackjack kills Trifaccia in public and delivers a blow to the morale of the monarchy.
When approached and asked to join her cause, Illesoa demands the PC's prove their loyalty by performing the following tasks:
1). Blackjack, "hero of the people", has been fighting our forces in the streets and rallying people to the rebel cause. Eliminate him.
2). I have it on good authority that the remnants of the Arkona family have discovered my plans and now oppose me. Discover what they know and if necessary they must be defeated. (If your players haven't figured out that Illesoa is going to murder just about everyone in the city in a bid for immortality, this might be a good way to clue them in.)
3). Neolandus Kalepopolus still lives. The former seneschal may cause an unnecessary legal complication for us. Capture or eliminate him.
4). Bishop Keppira d’Bear, priest of Pharasma and suspected sympathizer to the rebels, is reportedly attempting to summon the aid of Planar Outsiders to thwart us. Find her and destroy her summoned minions. (Here's a good opportunity to throw in some extraplanar creatures for the PC's to tangle with.)
5). I suspect there are shoanti warriors hidden within the city. Proof of an alliance between the traitor Cressida Kroft and the unpopular shoanti savages would be very helpful towards swaying public opinion in our favor. Forcing the barbaric shoanti from the city, perhaps by finding and killing their leader, would be even better. (There are indeed shoanti in Korvosa, led by the famous Krojun Eats-What-He-Kills.)
6). Sabina Merrin and her traitorous Grey Maidens are a menace and need to be stopped. Sabina is a brilliant general, defeat her and you'll throw their organization into chaos long enough for us to reclaim the streets.
7). Rumors of a new band of adventurers aiding the rebels disturb me as well. (The rebels are sorely outmatched, can you blame them for turning to hired mercenaries/altruistic adventurers? Peruse the NPC Codex and build the crazy high level party of your desires. Then throw in Trinia Sabor as the fifth member!)
8). Cressida Kroft must answer for her crimes. She hasn't been seen publicly for a while. If you can locate the rebels secret hidden base and capture her our work will become much easier.
At any rate, keep us updated on the progress of your campaign. It certainly seems to have diverged from the usual events and I'd love to hear how it all turns out.