First of all, I just can’t see how you can get anywhere in this scenario without serious probing operations. I don’t mean just building many probes, I mean setting up your entire empire around prying all the techs you possibly can. In order to do that and to cut the costs, you need a chain of bases leading to your base which falls in turn 1 (The Outpost, although CD usually renames it to Trial by Fire or something). Those bases must be 3 tiles apart to accommodate for transport movement. You can’t just use sea probes, they’re too expensive. Further, you don’t have the leisure to probe numerous bases for safest results. You need to focus on one base and be ready to throw several tens (literally) land probe teams at it. Most will die due to ‘high security interlock’ but you have no choice. Only after you retrieve all the necessary techs (D:AP, Fusion, some good attack like 12r, EcoEng, Ethical Calculus, SotB, PSA) you can even think about the main scenario objective. This is a quest in itself – Cha Dawn has throngs of units and his LoCs are deadly. You can’t just go one on one. Empath Rovers work best against land and air native life, sea units are best bombed with your Battleship, just don’t keep it in any sea base! It will quickly get attacked and killed. It works best at the 19,39 base. You will also need some cheap Needlejets, preferably with Empath to block land routes and some good attack Needlejets to deal with real units.
1. Beginning and the base layout
I always rescue both Colony Pods from the Outpost. The first one goes on the nearby 3-tile island and founds my first land base at 19,39. This base is crucial for further operations and cannot fall down. Then I take the second CP to the Mount of Planet and found a base at 3,35. The two sea bases build sea CPs in the meantime. These go to 9,37 and 13,39 and create a chain of bases. Afterwards, I build 2 more land CPs for 0,30 and 2,28, the only other habitable spots on the Mount Planet. And that’s it when it comes to colonization! Remember that the AI attacks bases with much less frequency than in-field units, you must fully exploit that feature (but don’t count on it too much – he will come after your bases eventually).
There is Sea Fungus at 18,40, it’s crucial to remove it. Use the Sea Formers near Safe Haven, while the other one drops Therma Harness on that energy tile close to Port Svensgaard. Both Sea Formers will promptly die and I never bother to build more.
2. Technologies
I start with Biogenetics and then go immediately for Planetary Networks, then SocPsych and possibly SotB. Afterwards I get like 1-2 techs per the entire game, the rest gets stolen.
3. Production
I built only RecTanks in land bases and Command Centers in all bases but one. I got also a few Aero Complexes, but never bothered to build even RecCommons – I run PS/Planned anyway and used units for drone control. Remember that facs can cost high maintenance, so use them wisely (you actually lose money under PS/Planned). I used no Nodes, Banks, Hospitals, any normal stuff like that.
As for units – decent garrison, a handful of formers for the Mount Planet, then several dozens of Probe Teams where you have Command Centers and Transport Foils in 1-2 bases. Remember that Command Centers increase the morale of your Probe Teams – this is key to have any chance of survival against the interlocked base. Afterwards I build Empath Rovers, decent air units and then Missiles to overcome his AAA defences.
Once you steal all key techs, you can scrap your Command Centers for some cash.
4. Garrison
At least 3 scout patrols everywhere, possibly 4 in sea bases. Later on, upgrade them to Trance and Police. The least you want to have is 2 x Scout Trance + 1 x Scout Non-Lethal. You may need more and you may need better armour. Only several units of garrison deter CD from attacking, so build and replace them as quickly as reasonably possible. As for your 19,39 base, put also one Scout at 19, 37 and 19,41 – otherwise you invite a landing party with a dozen of mind worms. Those Scouts will die occasionally from LoCs, replace them quickly. Bear also in mind that once CD deals with other factions, there is no amount of garrison which will protect you against his units.
5. SE
I started with Planned and then followed with PS – you need hordes of units, besides your economy doesn’t matter in this game. Once you probe everything you need, you can switch to Green for some cash and Planet bonus. In the Values line, use Wealth to build Aero-Complexes and an army, switch to Power when you use it (but CD put so much pressure on me that I could run Wealth only for limited time). I find PS better than Fundie, but maybe the latter is the way to go as well. I see no use for Demo, FM and Knowledge here.
6. Units
As I mentioned, be careful with unit design. Remember that Empath and Resonance is useless on Jets against LoCs, but can be used to kill (with no collateral damage) and block land units. Best attack Jets will also come in handy, CD is quick to get some 1-8-1*2 units. Trance and Empath units are your friends, Artillery and Nerve Gas can also be used to accomplish certain goals.
Also, LoC are immune to bombardment outside of bases and are targeted first when attacked by air units. It’s not worth it to use air against LoCs, dispatch Empath Rovers instead.
Always check the unit cost, you can’t afford wasting too many minerals. Think what you’re going against and visit the unit workshop often.
The best use for Probe Teams to me was to bring them to the 19,39 base, then carry with Transports to 22,38 (the coast), disembark them right next to the Outpost and immediately probe it. Transports will die, yes, just keep building them. If done correctly, you should have most of his techs by ca 2175-90.
Remember that disembarking costs always one movement point, so you can safely disembark on Fungus and still move.
Basically, at one point you may want to retake your fallen base the Outpost. Use Probe Teams to destroy drone facilities and Nerve Gas to reduce population. If you’re lucky, you will steal some juicy units – keep track of that via infiltration.
7. Projects
I cared only about the HSA and this only to deny it to CD (if he gets the HSA before you probe air power, Fusion and good offence, you can practically reload). I managed to grab the MCC when I saw opportunity, but it wasn’t that important. Don’t waste too much time on the Projects.
8. Other factions
I was feeding Santi with stolen techs on regular basis, apart from that I completely ignored the existence of other factions and didn’t even explore in their direction.
9. Cash
I refrained from hurrying my production as I was short of income under PS/Planned and wanted to have several hundred to mind control his base at a proper moment. Remember you may need quick cash for unexpected upgrades, so don't waste it and try to have some reserves.
There may be other approaches to this scenario but I’m quite sure the above basic idea should be followed, i.e. you can’t rely on your own economy and must set up heavy espionage. At first I was thinking about colonizing the northern island slightly to the east, the one with the monoliths. I could then build many Infantry Probes there and simply leave one base unattended for CD to capture it and for me to probe rape it in return. But this proved too much hassle and I realized I must be closer to CD. If you discover any other strategy to beat him, I’m dying to hear it. :)