Ranger - "Higher Vampire" [5th Campaign, 5th Mission]

Phoenixes are only needed if you haven't killed all the dragons that the wizard's window showed you. If you've killed them all, then you definitely won't need phoenixes. ;)

See slavi-t's message about the dragons.
Kill all the dragons, and he won't be reborn. And you won't need to save any castles.
Regarding upgrading 8 castles. You already have 8 - that's a lot of money! I think that's enough for upgrading.