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I didn't remove the retaliators; I ran the single goblins to the right and down, and after 1 round, the single goblin moved as far right and up as possible. The big guys attacked the upper left stack; after 1 round, 40 HP remained, after which they only attacked once. Now, the choice is whether to eliminate the dogs or the goblins; it's up to you, but I preferred to lose more dogs and use them to attack the full stacks.
Wicc, I'll correct you a bit: I think that THREE angels are worth the losses.