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I completed this mission quite easily. First, I captured the lower Elven Castle, then rushed towards Inferno. After capturing Inferno, I had only 134 Master Archers in my army (I gathered them along the way). I gave these archers to the hero I hired in the tavern... hmm, what was her name... the one with the catapult that shoots fireballs... Ah, Delib. Argail fortified himself in the city, and Delib I sent to the northeastern exit from the Underworld, and, of course, he started capturing mines. Delib, with just the archers, easily took over the castle near the exit, which was fully built, by the way. Argail, with his reinforcements, started clearing out the dungeons. The northeastern city was taken from me twice, but Delib, with reinforcements from the lower city, took it back. After that, they didn't bother me anymore. Then, I calmly cleared the map, capturing the northwestern city and gathering troops along the way. Argail defeated the dragons and proceeded to Erivell (I think that's the name) to level up. He cleared out the outposts and took dragons, druids, and archers from the Elven Castles, and Cerberuses, Succubi, Cave Krakens, and Archdevils from Inferno (of course, not himself, but with his heroes). And I easily defeated the hero in Erivell with almost no losses. By the way, it was none other than Alastor (I think that's his name) - the Elven King.
Difficulty: Hero.