The waypoint at the start is for the Phantom Forest. Follow the road southeast, it goes alongside a river. There's an island with the mud huntresses on it, you pass right by. They're completely optional and skippable, it's just bizarre what a difficulty spike it is.
Just now, I actually beat the fight, with only two deaths.
I do use crowd control in most fights, but in this one it's simply a matter of "use CC or die". I put the party into Sneak, got as close as I can, and had Jahan cast Blind on one of them. He died of course, but this time I didn't worry about bringing him back immediately.
Using Sneak to start fights does odd things to the turn order. In this case, all the enemies go first and all my party members go last, but in this case, it started in the middle of the turn with my party going. My Shadowblade used Stun, Madora used Crushing Fist, My Wizard used Boulderdrop to try and knock down two more (but only got one).
From that point on, it was a matter of juggling sure-to-hit status effects, buffing and healing wherever possible. I brought Jahan back, I think on Turn 3. His job was mostly blinding and Slowing, with some healing as well. Madora used AoE attacks and had her armour buffed (and even drank an armour potion). It was about making sure that as few of them as possible were capable of attacking at any time. My Shadowblade was killed by an Attack of Opportunity when moving in for a backstab, but by that time there was only one left.
Without a doubt, that was the hardest fight so far (although admittedly, I missed out on the boss in the firey area in Luculla North
I bypassed the demons guarding the Bloodstone
).