I have faced that problem a few times while replaying the game.
If your party is unable to kill Erathsmedor, then my suggestion is to go back out of Dragonspire, go to the Boogre Cave entrance, cast vanish which will take you to the Doshi-Gin area of the Boogre caves, go to the single treasure chest to the south west and cast vanish again. This will take you to the exit side of Dragonspire and on the road to Brimloch Roon. Then you can continue on with the game and when your party is more experienced, go back into Dragonspire and let out your anger on Erathsmedor!
spoiler alert:
ps: you should cast a "create portal" on the ramp exiting Dragonspire because from the ramp you can jump off and land next to Torin to go back to Ishad N'Ha, and you can cast "teleport" to get from Ishad N'Ha to Brimloch Roon quickly..
pps: if you want to take out Erathsmedor, then you should maximise your protection against fire (hopefully one of your characters has bless and artifact of fire spell and bless those plain rings or armor) and also use blessed up weapons (bless with the artifact of fiend spell)
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