I've been suspecting nearly the same thing.
Hypoxia can set in within minutes, and people can become extremely confused under its influence. If the pilots were so confused they thought the plane was malfunctioning for some other reason they might have started resetting things by shutting off circuit breakers and inadvertently shut off the transponder. Hypoxia could also explain the very extreme altitude changes that were reported.
I'm also thinking a fire in the cockpit could have caused nearly the same thing, and if the fire did enough damage that they could no longer control the plane but the autopilot still worked that also would explain most of what we know about the flight. But that seems a little bit or a lot unlikely.
If it is some terrorist or special operations chicanery then it is really an oddball scheme -- more like a Clive Cussler or Tom Clancy novel than something that would happen in the real world, I think.