You can take the m3u8 that youtube-dl found it your example above and then put that into an ffmpeg command to pipe to vlc.
Code:
ffmpeg -i "youtube.m3u8" -q:v 0 -bsf h264_mp4toannexb -f mpegts - | "C:\Program Files (x86)\VideoLAN\VLC\vlc.exe" - && exit
It was not smooth for me, but maybe you will have better luck.
You can also try pasting the m3u8 directly into vlc (didn't stream like that for me though).
**edit**
You can also do the same thing with livestreamer once you have the playlist (.m3u8)
You can use youtube-dl to write the json information which contains the playlists. (-j or --dump-json)