I finally beat Melvelous the Magnificent, but it was due to an AI blunder. My remaining character didn't have any movement points left. The AI (Melvelous) cast the lava tile under him, but then teleported my guy off of it to save him. If he didn't it would have almost killed my last character. It seems like the AI shouldn't teleport a party member off of a tile that is hazardous. There really wasn't any benefit to teleporting my guy at that point anyway.