I think the area is aptly named…
Tips to Beat Murder Cape
There definitely is a difficulty spike compared to previous levels. I suggest you upgrade your units to level 2, and perhaps choose talents that increases their durability or ability to destroy buildings.
Try to destroy buildings first, and keep your head cool. Rushing too fast might just get you killed.
And of course, the whole are is optional. You can skip it and return back bit later when you are stronger. I suggest you first complete the Rune Quest-quest line, and maybe Misty Plateau and Crystal Mines areas to get more talents and runes.
Once you reach the Winterlands, you’ll start a quest for Necrodome. In Necrodome you can grind for money.
Level 2 units should be good enough to get you through the first parts of Winterlands, and it only costs 5000 gold to upgrade from lvl1 to 2.
Skeletons can have protection from arrows and fire via talents, so they might help you against the Elves and fire-bombing kobolds.
Make sure you grab the Fire Axe in the previous areas. It does a lot of damage.
Towers are really dangerous. The way to deal with towers is either run straight at them and focus your attacks on them, or find a path around and kill them last. Use your magic, that’s what it’s there for.
Lastly, make sure you’re using your character’s attack. You do a lot of damage. Your minions can take hits for you, you can always summon more.