After using the Log north of the Tungal Dam, the town will instantly be cured of its flooding problem. That was easy! Go to the inn and revive/heal all your troops.
With the flood gone, you can access the western part of the town. The Weapon Shop sells all sorts of awesome silver equipment. The spears and boomerangs are excellent purchases. Head out the western exit to advance to the next battle.

PICTURE	NAME	HP	MP	AP	DP	EXP	G
	COMMENTS
	Zombeast	65	0	61	41	102	114
	-
	Mantafly	69	0	44	37	102	264
	Flies; Can attack from 3 spaces away.
	LandUrch	57	0	59	77	207	414
	Can attack from three spaces away.
	Manticore	77	0	63	41	207	414
	Resists Fire Magic, Weak Against Ice Magic; Can Attack from 2 spaces away; Attacks by casting Burlaiz (consumes 0 MP).

This battle is long, arduous, and anything but easy. See all the Manticores everywhere? These behave just like Hellfires, but they are much more powerful. Needless to say, they can mow down your armies pretty quickly, so you'll want to take them out as quickly as possible.

There are two main routes, the southern and northern routes, so you'll need to split your armies to go both ways. Send two of your armies along the southern route, and two along the northern routes. The most difficult part of the battle is probably the beginning, so try to stay out of Burlaiz-range of the Manticores, and try to concentrate on the Manticores. Like most fire-based enemies, Ice-based magic works well, so Krulaiz is a life-saver.

Making the battle more difficult is the Monster Dens, which will quickly fill up the screen. The upper-right and upper-left dens spawn Zombeasts, while the other dens spawn Mantaflies. Neither is as much of a threat as the Manticores, but they can quickly overwhelm you with sheer numbers if you don't close the dens off quickly, so try to keep your armies grouped tightly, since they don't cast any multi-hit spells. If you're careful, and keep your troops alive, you should be able to get through this battle.