Tons of people have been complaining about the harder pirates in Diplomacy.  Until something gets worked out, or you really want to experiment with something else, here's a basic mod to nerf them.  It gives them only one upgrade per raid, and then the individual upgrades are nerfed slightly as well.  I cannot verify if this will work, and if so, with what mods.  You CAN delete Gameplay.constants from this version to recieve a harder pirate challenge, or copy the Gameplay.constants from your favorite mod if you know what you are doing.

Download: http://www.filefront.com/15713931/Nerfed%20Pirates%20v.1.zip