Heart of the Night

I would at least try to level up to 23, as there's a good dragon enhancement there. Are you using the Druid channel? The dragon gets a significant buff from spells. Regarding the scenario – it will be difficult with machines and chaos, and on a high difficulty, it's unlikely to be passable at all. I tested it on a hero, using Light Blessing + Leadership, and kept around 130 archers by the time I reached the 2nd enemy – I was able to win without critical losses.