Yep, I think it boiled down to absolutely terrible luck with loot. I know the barrel just before the fight you're talking about, and it contained a sword and a staff for me- the sword wasn't even equippable (not enough strength on my assassin), and the staff was actually an upgrade, but my enchanter still didn't seem to be able to do squat to enemies.
I did make the decision not to fight the soldiers, and maybe that was what I missed to get level 2 before that fight, but have them with me or have level 2? I donno.
