To answer the question you asked yourself at the end of the video.. yes, you could have beat the Soulcaster's group earlier. The extra levels and top-end gear you got from the last dungeon didn't hurt, but the reason you got wasted so hard the first time was clicking through the turns so fast that you didn't seem to notice it was the Alchemist that was killing you until you were already dead (same thing you did with the big beetle-monsters, incidentally, not noticing they were smacking the entire party until it nearly killed you.) Rearranging the party and playing defensively would have worked just as well then- there is pretty much nothing in the game that will be able to kill you through Regen All + double Heal Alls. You might have had to spend more turns throwing Potions or having Sharpe or Cthulu Taunt, but you'd have gotten through it after you burnt down the Alchemist and got rid of his AoEs.