I discovered a very easy way to kill the Killer Bunny at a very early level assuming you magic missle or a bow.
Kill all but the very last rabbit to summon the killer bunny and head toward the river near the fortune teller; once there, kill the final rabbit near the stream, while standing in the water, you can still attack or cast spells from a distance, and the rabbit won't follow you into the water. It takes quite a lot of hits to kill it, and I also made use of a summons(I used the creature) but any summons would do really.
If you have jewelry that add wisdom it's a good time to equip it. I was level 10 when I killed the 'Killer Bunny' I used Magic Missle and other spells, I had a pretty good supply of mana pots as well. The creature and I took him out in about 7 minutes. Hope that helps someone