I have the same problem – dealing with Dwarves after several months of gameplay. They constantly deal double and triple damage, and vampirism doesn't help because, for example, a dragon drains health, and then 5 of them are resurrected, and in the next attack, another 10 are killed. And none of the Necropolis units have retaliation, except for the higher vampires. Dwarves cast spells like "Mass Curse" and other similar spells, and they also have "Stone Skin." Interestingly, reducing their morale to -4 doesn't seem to affect the battle at all. I mean, a simple banshee's cry and an artifact that reduces morale. And despite having "Arcane Mastery," my hero rarely casts spells. In short, we're working on it, as they say.