[Debaser]

Welcome to the board, first off.

Well, there is really no secret to "solving" the Chromatic Demon. you just have to kill him! the major challenge with this is that he has a sick rate of regeneration, so you need some tanks in there using whirlwind/greater whirlwind on him most of the time. another tough part is that every form he shifts to, he becomes impervious to a certain form of attack (such as fire or cold...)
Don't try luring him anywhere, I don't think that will make a difference, and furthermore this probably gives him more free time to regenerate as he follows you.
the best advice i can give you is once he appears outside of the cage, have some tank fighters with good ACs and damage surround him....start smashing away...maybe throw a few lower resistances and such in his direction, and towards the end have everyone attacking him w/ physical attacks (i.e. mages/rogues with ranged weapons, your fighters up close laying down the law with whirlwinds, power attacks, and what have you)...
With a bit of luck, you'll have the bastard creamed in no time. The key is smashing him beyond the threshold of his regeneration.