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I just can't beat it, I keep getting destroyed by the fireballs overy two turns, even if I manage to form a champion, it still gets destroyed, nothing help, not even a lvl 5 death knight with the damn cloack...
Use the accessory that drains power. Use ghosts as your only non-core unit. Your first priority is setting up ghosts, second is setting up walls. Never bother forming an attack that isn't ghosts. Stall and use your hero spell.
I agree with what "The Flood" posted. I used the accessory that damages the opponent for 2 points ever turn and created as many walls as I could to stall the match and let the accessory do it's thing. If I remember correctly walls do not get damaged from the bombs. If you manage to build up your spell meter, use that as well since it can knock off at least half of the opponents health.
Walls get damaged if they are on the second rank. The fideball only affects the 2nd and 3rd ranks. The first time I played the level I thought it was impossible, but using the artifact that drains 2 health/turn and occasionally getting double formations (so the back one doesn't get destroyed) and then using the spell made it doable. I didn't think about making Ghost formations though!