After talking to hapheastus, I fell into a hole. On one side is a lake where the eels are (and then, the lava on the other side of the lake). On the other side are the Fuming Fungi. The Fungi's keeps wiping my guys out. How do I fight the fungi and still survive? Any help would be appreciated. Thanks.

The FF's are susceptible to fire spells, like all plants in the game. Burning Haze on the lead FF is good, as the ones behind tend to blunder into it. Just keep your distance so you can toast them and they can't gag you.