- Station your party at the top of the hill, near the teahouse.
- Place an explosive barrel or two along the path down the hill, for insurance, in case you miss a lot
- Drop a torch or candle at the top of the hill for dipping
- Send a ranged attacker down, wait until the nearest Sheep/Redcap is isolated; shoot it, run back
- Pick them off as they wade through the mud and make their way up the hill, maybe flinging the odd Grease bottle or acid vial to slow them down further.

No need to take a single point of damage. You can also sneak around and take out the sage quickly with a backstab & surprise melee attack, as it's his spells that make the others so dangerous.