I've been battling him a handul of times now, and each time i end up dead with the rest of my crew. Is there some sort of secret involved here, because he seems invincible from where i stand right now ?

I'm not sure, I took the peacefull dialog option.

Didn't work for me, no matter what line i went with, they all turned into battle.

The one right at the start or is there another?

from when you help the Lizard being attacked by the zombies to release his friends you have to use the passive approach. By telling him all you want to do help and talk to the lizardman Chieftian.
The lizardman joins your group and you enter the castle and kill all the Zombies Then save his friends and if you stay passive he takes you to the lair. the Chieftian will tell you your a lier but you try the prrsuade it fails then again and you tell him there are more two legs (Humans) than Lizardmen and in the end all the lizardmen will Die thats when he says hell try. you select the lie that you have influence over the towns people and you can convience them to live in peace and he agrees. next thing you find yourself back in town and look for the Elder Mayne and your ready for a boat ride to neverwinter.
OH and make sure to tell the Elder that its better to be friendly and live in peace together. You'll then receive 400 XP and he gives you some magic Armor and you head to neverwinter.

[ 11-10-2006, 09:00 PM: Message edited by: TheCrimsomBlade ]

Well, no matter how much i tried, i couldn't solve it the peaceful way. it had to come down to battle, but i finally managed to defeat him, and it wasn't easy. So the Lizards are now siding with me, but the boattrip you mentioned didn't occur. I spoke with the Elder, and he gave me the armour like you said, but there was no boattrip waiting around the corner for me.