It sounds like something out of the Flashman series: A ragtag army loyal to the 75-year-old Sultan of Sulu invaded the northern part of Borneo in early February. Their goal was to retake the state of Sabah from Malaysia, which in turn received it at independence from Great Britain, which had taken it over from the 19th century British North Borneo Company. But, since Sulu itself became part of the newly independent Philippines in the 1940s, the Sultanate surrendered its claim over Sabah to the Philippines, and Malaysia decided it was cricket to acknowledge the traditional ties by paying the government of the Philippines a token amount each year for the right to control Sabah. Got that?

Well, it’s no longer a laughing matter, as I explained in the Wall Street Journal this week. After a month of negotiating with the 200-odd insurgents who occupied a town in Sabah, Malaysian prime minister Najib Razak last week ordered paramilitary police to clear them out. Since then, fighting has led to 60 deaths, including eight Malaysian policemen and 52 insurgents. Thirty-one insurgents were killed on Thursday alone. The Malaysian army has moved in, and this week, Kuala Lumpur rejected a United Nations cease-fire plea. The sultan agreed to the cease-fire, but has rejected all demands by both Malaysia and the Philippines to renounce his claim and call back his fighters. The struggle is a toxic brew of nationalism, religion, and anti-colonialist memories — all of which go to show how hard it is to create modern nation states in archipelagic regions where dim claims to islands by distant rulers were the norm for centuries.

The only good news out of this South Seas scuffle is that Manila and Kuala Lumpur seem to be cooperating closely, at least so far. Philippines president Benigno Aquino announced criminal charges were being drawn up for the sultan, though he wouldn’t approve an extradition request from Malaysia. Ships from both countries are patrolling the waters between them in order to ward off any other adventurers who may decide to join the cause.

However, the longer this goes on, the more the danger grows that nationalist passions in both countries could shortcircuit the official cooperation. Malaysia may use overwhelming force, resulting in an outcry in the Philippines, or Manila could be seen as not acting strongly enough to stop the sultan. One reason for President Aquino’s measured response is that the sultan’s territory is in the southern state of Mindanao, where the government just concluded a peace treaty with Islamic rebels after a 40-year struggle. The sultan’s dreams of 19th-century tribal expansion threaten to upend this crucial peace pact, if local forces believe Manila is crushing a fellow-Islamic movement.

The news stories may evoke images of Joseph Conrad, or Harry Flashman cavorting among the islanders, but the situation is deadly real, and cuts right to the fragility of today’s Southeast Asian nations. So far, it’s been handled well, but with the U.N. now stirring the pot and riling up Malaysia, things may get worse before the inevitable end of the Royal Sulu Army is written.