Wow, quite a bit of work making an RPG out of a strategy game. Hats off for that.
Still, even on the lowest difficulty, I find this pretty punishing. E.g. the wizard's apprentice quest (level 3 wizard) - I tried this various ways, had magic resist gear and heal pots, even starting out hasted for double-shotting I still got roasted. Meteor swarm is just game over; strongold of the nine - boss was do-able, but statues slaughtered entire party. I dread to think what this would be like with more and auto-healing enemies! Bit too hardcore for me, I think.
A particular problem (though I am assuming not a bug) is when events take all my movement. E.g just entered Mithril Hall, got all my party bunched together ready for trouble, and Bruennor calls his chums. I lose all my remaining movement, so there is absolutely nothing I can do while he gang-kills 2 party members straight away.
I've also noted that the stronghold I got at the start of the game is no longer able to produce 2 units. I assume the villagers are sick of dying in my service!
But, whining aside(!), this is an impressive mod. I very much hope some of this (magic items etc.) makes it across to the strategy mod.