After updating to 1.1, I started a new game and have beaten the first boss fight on the first try (though my gladiator got blinded - permanent condition not easily removed). There is now enough xp and gold to make it to level 3 before the fight and that makes all the difference. The fight is still difficult but nowhere near as it was with level 2 party.
Also the pool area is now working - that was the only fight giving me difficulties. Bug: after entering the pool second time, have to save and reload to get whole party back.
Arena is also working, last week the encounter did not trigger.
Couple of comments:
I found a pipes for bard which give per encounter use of ice blast (I think) but there does not seem to be any way to cast the spell/ability.
Can scrolls be modified to include the spell description, as well as type (wizard, cleric) and level?
Also there is a problem with the cleric spell elemental weapon (I think), where the selection from the spell's page does not carry over to the second page. On the first page I selected acid, and it reset to fire on the second "page".
Overall good stuff, I think the encounters are designed correctly - it was the game not working properly that made it too hard.
My party:
half giant fighter - two hander and heavy lifter
human gladiator - two two handers (eventually) - does not have to have an armor
halfling aquamancer - awesome elemental damage and support healing/summons, small size for passages
dwarf cleric - magic and turning - at this point mostly healing and summons, and dwarf search
elven blue wizard - 20 int for the 22 checks searches, and enchants and usual damage
elven bard - great support, with early silence, ranged heals - bit worried if she'll be able to keep up later.
First mandatory feat for everyone - improved initiative, second for caster superior concentration