Um...
You can *buy* stone-to-flesh potions in the mages guild!
In killing the Naga, I found that if you stay in those two rooms where you first meet her, you will likely die. I ran to the other side of that disc and pulled the lever, and ran into the hall, turning right. She leaves the room and goes into another section. There is a point that she won't follow you past, so you can spell her from a distance, or jump out, beat on her for a bit, run back around the corner, heal. Repeat. It will take a while, but it's worth it when she goes down!
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