Good tip, which I used:
Come back a few times <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />
First time - Kill 1/2 of all Dwarves ( take a few restoration with you! )
Second Time - Kill all other Dwarves ( take a few restoration with you! )
Third Time - Attack Josephina with a sword WITH FROST ability, so you can freeze her. You need 2 healing potions if you do it correctly <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />
When facing her in Black Ring Lake, just Freeze her <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />