The mission is easy to complete under these conditions:
1. Cast the Portal spell to transport both heroes to the city (I had a Wolf stationed in the castle, and Duncan was roaming with a small army; if needed, I sent him to the castle).
2. Don't try to capture Horncrest (Laslo isn't there, but if he shows up, his army, as everyone knows, is the largest).
3. Gather as many artifacts as possible that increase initiative (in my battle with Laslo, the knights of Isabel always went first; with the help of artifacts, I eliminated this problem).