Second try. I lost after a 1.5 hour annoying battle.
Okay, so I'm doing good so far. I wittle down their forces to just Miluda and a single thief. I try to kill him, but he has HP Restore, so he's back to full life. He runs away. He goes off and revives half of the team. I try to focus on Miluda, but my mages have zero MP, my archer is blinded (thus useless), and the guests ignore Miluda. Algus had his weapon broken on top of that. Miluda's regen plus chakra nullified any damage that I did.
So I couldn't kill her, and the rest of the team made a come back and destroyed me.