Problem? What problem?
At the end of the trail near the water is a group of trees that the Hydra can't fit through. Just stand back far enough that you can still see and target the beastie, but it rarely, if ever, will be able to attack you. If you run out of mana for your spells, go for a cruise around the sea for a while, then return when your mana is back up, and go at 'em again. Also, if you have someone with bow skill, try shooting it with poison arrows or dragon arrows. Although Dragon arrows sometimes turn to stone, so you don't want that after all. The Hydra is a quest for the B/R Town Hall dude, and I don't know if turning it to stone will suffice.
+Dr.Pick