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Anna, I did it this way. I took all of Godric's troops and gave them to Isabelle. She, while sitting in the castle, will repel any attacks from Red. At this time, have Godric run around and find the obelisks. When you find the Tear of Asch, give the troops back to Godric and let him run to meet Nicholas. That's all.
I have the same problem. I gathered an army larger than this elf's, but with his upgraded luck, he defeats my hero so easily....((((
Try going around him :) :) :)