I am looking at giving them a treatment similar to the aboleth (weird, psychic aquatic (in this case, amphibious) race with a very unusual civilization that has few parallels to our concept of civilization) and warhammer orcs (multi-stage life cycle, starting with pirana-like tadpoles who grow into intellegent Kneuts that eventually grow into troll-like monstrosoties who exist more or less to try to eat everything). They are also suseptable to weird mutations.
Basically, their oddity makes them appear as an affront to the natural order of things. One thing that has bugged me about other aberrant and "madness" things is that often in the books the writers pretty much say "Well, their motives are beyond what we can reconise, so we're not going to try." I understand that's a whole Lovecraft thing, but I think something better would be to explain how the race is different and weird, to create a heavy contrast with what the PCs know.
Right now, I'm leaning toward Kelpoleth as a race name (Kelpie + aboleth), but that's because I haven't thought of anything better, yet.
