Invisibility should work completely when the invisible monster and the detecting monster are far apart, but when within 5 (or 4?) squares of each other, its location should be known to within 1 space (fuzzing the real location by 1 space in all directions). When the invisible monster takes a direct offensive action, or with some probability when it is adjacent, its position should become known. It should still appear as I, but the I will move wherever the monster goes until it becomes 5 or more spaces away, at which point invisibility should once again work fully. This could work differently if the invisible monster is stealthy.