This scenario is as difficult as you want to make it - in theory, it's very easy indeed. Alvince will remain at the top throughout most of it, so make sure you kill everything else around. The Paladin and Mage are in small rooms - ~ do not ~ venture past these rooms before you've taken everything else out.

You might want to position some troops around all the statues to the south. As soon as someone progresses past those rooms, Alvince will cast Fireball on the building, which will burst into flames. At this point, your Win/Lose conditions change - you mustn't let Alvince escape, and he makes a beeline for the chimney type structure in the centre of the large grey room to the south.

Now, before you do anything else, there are two chests at the top end of the building. The one on the left contains a Bloody Lance (which shouldn't be that helpful...), and the one on the right contains Iron Armour, which is very good indeed. Also, getting Alfred to the chest to the right will open up Scenario ?4 (see below). If you can get these guys there quick enough (Teleport will help), you should go for it - but if the fire touches you, you die instantly.

Once you are satisfied, just hunt down Alvince. Block off the chimney, and attack him. Once he's dead, the Scenario ends, but keep everyone away from the oncoming flames, which spread at one square per turn.