Hi Saz!
We had to do it the same way you did, resting and healing. Kerish was still up there and we killed him and got his special weapon. I don't think he had a badge and there wasn't anything special about killing him, except for the spear that was left on the floor after he was dead; when identified it said it was his spear and had special frost damage capability. I don't remember if he was worth any extra experience or not. I guess I was in too big of a hurry to get out of there.
A worthy game indeed! I played the first few chapters without knowing about the "pause" feature. Man! was it hard!! LOL I just finished the final battle (whew) and installed the Heart of Winter.
Hope this is helpful. Let us know how it is going. See you later. . .
------------------
I can do all things through Christ Jesus who strengthens me. Philippians 4:13