Yea I had the same problem. If I play like I would like to, I would leave with lvl 4 or something... and since the last fight is really hard at lvl 7, it would be undoable at lvl 4...
Last time I killed all the *bad* guys and reached lvl 7... what if I do not want to kill all? it seems as if being *good* makes you loose/ not be able to finish even the first chapter.
Would be nice to have some feedback on this, is there anyone who got through without killing every soldier etc?