Considering how the aliens watched earth for quite a while before attacking and how they are masters of biological warfare, it wouldn't be surprising if they found some sort of alien virus that turns people into aliens. Chrysalids are a kind of virus. Only a) they are bigger and b) they have rather short incubation time. Now suppose the aliens invented a small virus that had say a week's incubation time and started spreading it over cities. Wouldn't that be lovely? Xenonauts would have to rush to kill the virus outbreak before the whole city would be infected. UFOs could have viruses on board on a regular basis. Xenonauts would be surprised at first, how some of their soldiers perfectly out of the blue would get sick and turn to aliens at home, forcing them to fight a (small) base invasion scenario. Only after a while, if their research would be fast enough, would the Xenonauts realize, that they have been infected and needed some cleansing of their own and of any scenes where aliens have been killed. This could expand to a battle between the Xenonauts and the aliens researchers, as -- supposing the initial production cost of the virus is rather high for the aliens, the human immune system has a good chance of killing the initial virus and the initial virus is a one-shot thing, in that it cannot reproduce within humans, just change them -- the aliens might be able to create higher quantities of fiercer viruses over time.