Your character is probably blind. Area effect spells that do not need a target (or the warrior's spin attack, IIRC) will still do damage, or you can drink a shadow potion and wait for the Blind spell effect to wear off.
You can cast Aura of Command on Josephine's deathknights to turn them against her, though they will not last long.
Chasing Josie... techniques for defeating Josephine