Xydusa is one of the hardest monsters to defeat since your characters are still quite raw.
Bows and long distance spells are not very effective. Better to use defensive spells such as haste, heroic might, bless and take Xydusa on in melee. Time your attacks and strike at Xydusa just as she is leaning backwards. This way, her atttack is interrupted so no damage..
If you need to rest in this fight, run to the other side of the room and keep the large disk in the middle between Xydusa and you. This way you can heal up.. Lastly, hopefully have stone to flesh potions because Xydusa's spells may turn your character to stone
ps: if you want the snakeskin trait (50% resistance to poison) for one of your characters, Xydusa has to be alive when you meet Elyssia.. This means running past Xydusa for the time being.. Don't worry - you can still go back down and kill Xydusa after your encounter with Elyssia..
, you interrupt her attack and you can get away with Xydusa hardly getting any attacks