GAME OVER!
I had just finished Lum the Mad's machine, and when I arrived at the next level I recognized it as a place where I had a lot of trouble last time I played ToB. I decided I'd go for some more XP first and face the second challenge in my Pocket Plane. Little Gnick O'Thymes evil twin broke down my Stoneskins so fast an landed a killing blow. Ugh. I was pretty good on the defense as well, but I'm upset that he was still able to attack me after I cast "Sanctuary." Now THAT'S cheesey IMO.
For the record: I had killed Yaga-Shura before starting Watchers Keep and getting as far as I did.