noted I was playing on normal setting
My apologies, I did miss that.
The AI is just that, artificial. It may simply be that you were falling behind for a while and the AI tends to really get going at around that time (sounds about right for how long a normal AI takes to max out its fleet).
We can't tell you anything without knowing how many planets you controlled and what fleets were used, but I'm guessing either you were totally outmatched by the AI but couldn't tell, or you didn't realize how powerful some of the new units like titans are, which will require some different strategies that you used in Diplomacy (mainly, not using lots of frigates against them).
Why would a save game produce a different scenario when I come to play it?
Even Sins has random effects for some abilities, and you can actually change the AI when you load a game, so perhaps that caused the AI to change what it was doing (or it changed in response to you doing something different to avoid defeat).