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Overall, the balance is decent, but it needs a bit more testing. As for the Cerberus, perhaps its damage should be left as is. Now, you can choose between Fire Hounds and Cerberus, although the Dungeon creatures need the "Killing Blade" with +3 damage instead of +4.
And this is also an imbalance. With this, it will kill all peasants and goblins in one go. It's better to revert to the original strength of the "Killing Blade." +3 damage, and especially +4 damage for a creature, is just pure sadism, not a noble battle.