After pasting the AI on normal a couple of times I decided it was time to turn up the difficulty to tough and see how it would go. I played version 1.0x, tight clusters, abundant stars, common planets, uncommon habitable.
My custom race has a 20% bonus to economics and research with some points thrown at weapons for good measure. Even with a federalist government the AI's economies were blowing mine away from the get go. I was behind in research as well and my diplomacy was not good enough to allow me to tech trade effectively. After winning a long costly war with the Korx (who had declared war on me) I felt I had earned the respect of my nieghbors and would be left alone for a time to build up some more infrastructure. That's when the Yor and Drengin decided that they needed my planets more than I did.
I never did see a Yor ship other than some scouts who were swiftly dispatched, but the Drengin were relentless. My state of the art M-4 fighters and Imperator class Frigates were worn down by wave after wave of Drengin fighters. My masterfully executed but desperate counter-attack into the heart of their territory failed because my tech level and soldiering were insufficient for me to capture any planets. I managed to convince the Arceans who had the second best military to assist me but it was too late. What few of my people survived now live under the cruel yoke of Drengin occupation.
It is clear to me that my early game planet development strategies which served me so well on earlier difficulty levels are somewhat wanting. Can anyone offer some tips?