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Passed it on the first try; first, I used two heroes to grab all the nearest mines and resources while simultaneously building up my Castle. After capturing everything in my area, I moved toward the center and took everything there—and I got lucky in the mages' vault with a Town Portal spell, which helped. An enemy hero arrived from my side, whom I successfully routed, but then Laszlo showed up, and I couldn't defeat him in the open field. I had to cast a portal to gather troops (I recruited 5 Fire Dragons, I don't remember the rest; basically, the army wasn't very strong), tried attacking again, and he crushed me once more. Then I ran past him and quickly captured his nearest castle. Laszlo merged his forces with one other hero and came after me, attacking the castle... That is where he met his end.
I couldn't dig up the Tear of Ash because Laszlo was constantly hanging around the center, blocking the path for the hero from the prison. But that was probably for the best; I finished the mission faster.