I think you can get Azuredge right from the start. Talk to Bernard in the copper coronet, but make sure you've got enough money (you can use it as both a normal axe and a throwing axe).
Possible approach:
Memorise negative plane protection, or see if you can find a scroll (small chance).
When you find out where the vamp is, cast npp on the character with Azuredge or a character with a lot of hitpoints and armour, then put the protected character in front and start throwing Azuredgeuntil the creature turns to dust (bat/cloud etc.)
Like I said, it is a possible approach. That's what I would do if I did the quest at a low level. Or maybe I'd do something else entirely, depending on my party's exact skills. You never seem to know [img]smile.gif[/img]
Try it your own way first, if you become desperate, give this a shot. If it still won't work, ask more advice