What I did was to beat his first form to almost dead, then ran my characters without haste/boots of speed away, then killed him. I was able to go up the stairs, then go back down after using 2 protection from magic scrolls + spell trap, you can get the scrolls from the advernturest (thats my best guess) market.
When I went down the stairs, the party was arranged so the protected ones were the nearest ones to Krangaxx, all I had to do was keep the unprotected ones away from him, and voila! No PCs imprisioned, no romances broken, no Mazzys acting buggy after you cast freedom...
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