Island of Fog, Book 1 by Keith Robinson
Summary: A lonely, foggy island is home to eight families. Twelve-year-old Hal and his friends have always wondered what happened all those years ago on the mainland, that unseen place Out There beyond the fog, and after an astonishing discovery in the woods the children are more determined than ever to find out what their parents are hiding. But their lives are turned upside down when Abigail reveals her closely guarded secret. According to her, the children are slowly changing into monsters! Are they freaks of nature, or subjects of a sinister experiment?
Each child reacts differently to his or her unique monstrous transformation; after all, one may feel proud to be a dragon, faerie, or centaur, but who in their right mind wants to be a sadistic manticore or cowardly harpy?
Island of Fog is a story of intrigue and conspiracy. The reader follows Hal Franklin as he struggles to accept that he and his friends are something more than ordinary children, and that their parents have been covering up the truth the whole time. With their trust shaken and the unexpected arrival of a strange woman from Out There, the children hide their frightening shapeshifting abilities and pretend nothing is wrong.