Finnaly I have reached the point in Dragon's Eye where I can escape from the wretched time loop. But how on earth do you kill the priestess casting the spell? She's mirror imaged among other things and I can't dispel her protective magic (using dispel magic) which results in her only being barely injured when she completes her spell. Any ideas?

Outiluke's Resillient Sphere is an evil tactic, but it works. If you can get to her fast enough, you'll get her. Miscast, Creeping Doom and some other spells will tamper with her casting.

Chromatic Orb is also a good idea.

Disintegrate, Death Spell, and Finger of Death (and PW Kill) all work rather well.

Cast haste on your tanks. It really help.

There is this really cool spell called Symbol of Stunning. If you can get that one off, you're in the lead. The same can be done with some other Symbols and Power Words, but the mentioned one is the best.

The General thanks you for your help. A special thanks to Luvian and his haste tactic which worked so well.