Iron, you can take down Leprechauns like this (this is most likely the optimal solution):
1) Build a level 2 Tower of Death in the town.
2) The hero learns the Drain Life spell.
3) The hero attacks the Leprechauns alone.
Round 1: Cast Drain Life (one Leprechaun dies).
Round 2: Raise a skeleton from that Leprechaun.
Then, wait for the Leprechauns to come within the skeleton's range. Attack with the skeleton, and take the counterattack. Then, the hero immediately attacks the Leprechauns, inflicting damage. In the next round, get the hero's morale up (so that he has time to run away from the Leprechauns). And then, just run around some sufficiently large obstacle.
I think I've explained it clearly.