My 8-Player Impossible win was with a Winterwind-type. Feudal, Warlord, Telepathic, and as many combat bonuses as I could fit. Advanced start. I remember that I managed to take out two of my immediate neighbours right away, and that give me a solid hunk of worlds and resources to work with. Bunkered down for a bit, built up my forces, and managed to scrape together a victory.
I don't recommend making this LP an 8-Player Impossible though.
That was my experience too. In MoO1 I'd win as Darloks with a diplomatic victory just for lulz, but in MoO2 I found spying worthless. I always thought I was just missing some essential part of the mechanism, but maybe not.
IMO diplomacy in general became a bit easier between the two though, and I generally refuse diplomatic victories just on principal. I tend to get them when I'm not even looking for them, and often right as I gear up to take out Antares.