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Yesterday I completed this mission on Hero difficulty in version 1.5. The walkthrough tactic is the same as on Warrior. The main things are speed and aggression. It is better to lose some troops (within reasonable limits, of course) than to lose time.
Isabel captured the sawmill and immediately set sail to collect debris. She had a few archers and swordsmen. This allowed her to capture not only debris and chests, but also half-sunken ships without losses.
Markel quickly cleared his island, captured the lighthouse on the island to the east of his home, and sailed quickly toward the enemy's western island. He had a sextant. He made no stops at other islands. A support hero also set sail immediately.
When Markel approached the island, Isabel stopped scavenging and sailed toward him. Upon meeting, she gave him the artifacts she had found. From then on, Markel broke through the mines, while Isabel gathered the "goodies." Additionally, she took unnecessary troops from Markel so that he had free slots for recruiting/picking up troops. I took only gold from all chests. I didn't break through anything unnecessary—only mines and undead. It is especially important to capture the abandoned mine. If you're lucky, there might be sulfur there, which is scarce in the early game. I got lucky this time.
After capturing the mines, I gathered the undead near the teleport and used it to reach the enemy city. I took it easily and crossed to the other shore to the next city. There, they also offered no serious resistance. Isabel gathered what she could and followed Markel, as the druid had entered the war.
Next, Markel headed south to the last enemy city, captured it just as easily, and cursed it immediately. Meanwhile, the druid captured the city on the western island, and the enemies emerging from the portal took another city. Along the way, I encountered a level 20 mage with a small army. He didn't even have Titans. On Hero difficulty, instead of fleeing the battlefield, the AI uses Armageddon until the last soldier is gone.
After cursing the city, I didn't waste time gathering troops near the Castle, but immediately headed north to reclaim the northern city captured by the enemy and curse it. This wasn't much trouble. By then, the druid had crossed over to that city himself. He only managed to cast Armageddon twice. I remember that on Warrior in 1.41, he captured the knight's Castle, but here he rushed straight to his certain death.
After capturing the northern city, I captured and cursed the final city, both mage outposts, and wiped out all high-level neutral mages. I was afraid they might join the enemy. Only after that did I go to collect the undead near the southern Castle.
Everything went surprisingly easily—much easier than on Warrior in version 1.41. But then an enemy appeared who had 55 Titans and everything else in corresponding quantities. He recaptured the northern city and headed south. By that time, Markel had managed to collect all the undead at the southern Castle and met him behind a high fence, while Isabel, with all the recruited dragons, hid in the monastery. I saved the dragons and gave them all to Isabel.
In principle, I could have run away from him. The development limit had already been reached. All that remained was to visit all the skill-upgrades and obtain the Phoenix. As far as I remember, you can't acquire spells in the next mission, and in the 5th mission, a level 34 Godric is sharpening his massive sword. But it wouldn't be fitting for the cool Markel to flee from a level 1 mage. An aggressive level 20 mage had long since been recruited from the tavern and was guarding the Castle reclaimed from the druids on the western island. He had leveled up to 21 with me.
The hardest part was obtaining the Phoenix. I had to wait for long months. At first, neither the treasury nor the pyramid gave me any spells. There were no more enemies with large armies. 2-3 Titans under the command of an un-leveled rookie are nothing in such a long game.
Of course, without a well-organized rear, Markel would not have been able to advance so quickly. A crowd of support heroes constantly provided him with reinforcements. All knightly troops were converted into undead. Throughout the entire time, the enemy landed on the home island only once. A support hero delivering reinforcements to Markel dealt with him easily—upon his approach, he changed course and managed to return.