bonchik
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I completed it all – on veteran difficulty, although I had to constantly dodge strong heroes. The main conclusion is: under no circumstances should you capture the first Elven castle (only at the end). Then, try to gradually capture all (or most) of the mines, and then wait for the moment when Gilraen has a weak army and attack him. Maybe I was just lucky, but without resources, the Elves were left with only one strong hero with a decent army, and it wasn't Gilraen...