In DKS I ran into a glitch with the goblins in that same encounter, being unable to do damage at long range and barely any close range. At first I though it may have been because I was only at level 14, but after a few attempts at the group I quit for the night. The next day I loaded that same save on the section of path before heading down to the encounter, and was able to do normal damage (the fight was still challenging, but no longer impossible).
In D2:ED several people have run into problems doing damage to particular opponents. The goblin chief near the teleporter on the mountain path in the fjords has been mentioned a few times. In some cases simply returning to Broken Valley and then going back to the fjords (ie get the game to reload the area) would fix the problem. One person simply left the chief there and kept exploring the fjords; when they can back up the path later, they were able to do damage normally.
A couple people had problems damaging boars, one of whom reported magic was ineffective until they did some physical damage, after which magical attacks worked as usual.
With the Xbox version of D2:ED, from the main menu you can go into Settings and then the Gameplay section to adjust the Difficulty level (there is a slider for low HP auto-pause, a checkbox option to display overhead damage values, then the difficulty slider and a checkbox to show the crosshairs).
Do you have the same problem doing damage to the monsters in Laiken's study, or are they doing more damage to you than you can handle?
