The word allied is a misspelling and mispronunciation that, through extensive common use, has come to be accepted as a perfectly good word in the English language without anyone now giving it a second thought.
When it entered the language, allied wasn’t allied at all, but rather all-eyed. It was (and, in its current form, allied, still is) the past tense of “all eyes.” Saying “I’m all eyes” is similar to saying “I’m all ears,” except, of course, that rather than all ears you’re all eyes. Thus, if you used to be all eyes, but no longer were all eyes you, back when the term was coined, would have said “I was all-eyed.”
Because of it’s phonetic similarity, “all-eyed” slowly transformed into, first, “alleyed,” then “allyed,” and, finally, because “allyed” looked incredibly silly, into “allied.” After a while, people forgot the root of the word and started pronouncing it “ˈalˌīd” rather than “all-eyed.” Thus, rather than saying “I was all-eyed,” as you would have said back in the day, one now says “I was allied.”
WARNING: Leading biologists, preeminent medical researchers and a guy in shabby clothes who was recently spotted bumming quarters outside of a local liquour store generally believe that organisms consisting of only eyes—or only ears, for that matter—typically do not live long or prosper. They might, however, get a leading role on the next Star Trek film.