Oh I did, but I wanted to explore all the possibilities :)
First I killed the guards, then i killed Lucky James, then all his troops in the mines..and realized that Redbeard won't talk to me anymore. And, what is most important: quest failed! Noo goodies :( Boo.. then I reloaded, and finished the quest the right way :D

The way I did it was: get quest from redbeard, go inside, give the mark, take the quest from lucky, go outside, finish the quest, kill redbeard for lucky's quest, go back inside, finish the quest to get the map, kill lucky. Two dead pirate scum and lots of goodies for me. :mrgreen:

Talking about dead pirate scum reminds me - what is the deal with the Mad Onix pirate (who begs you everytime for 5000 golds to tell you the secret). Is there something more besides killing him?

..and the 100.000 gold still in your pocket! Yeah, i did it the same way, after some experimenting :) Thanks for the tips!

Solved the Redbeard/Jim tasks, went to king Darion for my reward and my new orders. So i met the guy in the forest, returned to the castle and king Darion gave me my next task, to kill some Duke in the Mines. I entered the dwarven mines, killed 2 or 3 manageable enemy armies and hightailed out of Dodge City, mobs too strong :(
Now I am buzzing around in the Islands and trying to kill the Kraken. I am lvl 11 now, and it seems, I cannot level further here. The friggin Kraken, I cannot beat him. I have no Resurrection spell and none of the spells for summoning..something/someone. AT start I am doing OK, but round after round, the Kraken is spawning larger and larger stacks of Devilfish: I quitted when the stacks reached 450 devilfish each. No way in hell I can beat that monster, he has like total 44000 hit points :(
Need advice, some cofee and..a drink methinks! Kraken with zero losses? How in heaven is that possible? I am missing something HUGE here grrr..

Hmm, i have beaten the kraken with lvl12. My army consisted of about 120 Archer (i had the scope (+100% attack) plus the elven bow), 30 shamans, 70 griffins, 30 knights and 85 royal snakes. My values of attack and defense around 20.
To beat the kraken you need at least 1 archer type and 1 with "no retaliate" ability. Good morale helps also making doble damage (my knights did the job well, doing about 1500 damage).
The spawned devilfishs concentrated on the shamans totems and my griffins finished off the mobs! Try to not let your melee troops stand behind one another as the kraken arm damages troops standing in a row. Instead place one melee troop in front of an arm and the other one besides it, so you take minimal damage for only one troop when the kraken retaliates.

The point is to provoke kraken so he won't be spawning devilfish - standing just before his main tentacle will do this - (it does not work always, but still often enough - so you have much more "free" rounds when he damages only your "provoke him" unit instead of summoning zounds of devilfish)

Other way around is to have thonrs - use the dead devilfish for new thorns - populate most of the battlefield with such summoned devil, so you gain:

1.) use the summoned thorns as provokative unit - win win situation
2.) if devilfish are summoned - if not free spaces are available - they won't be summoned - octopus loses one turn :)
3.) thorns are cheap and easy to get (mostly in Darion)

or use Similar strategy as for the turtle - get DMG resistant unit - (ghosts) (cheaper than castin god's armor - which is expensive, lasts only few turns, hard to get) and cast on it archmagi "shield" - another 50% less DMG - if you are lucky, you have stoneskin - increasing phy res as well DEF (phy res is not cumulative... ) - place this unit direct in front main tentacle - use the rest 3 slots for archers and shoot it down (even if the octopus will summon devilfish you will shoot em down)
Do mind that with good enough ATT/DEF your ghosts can last "alive" for very long time - the actually can replenish themselves from fighting octopus (or even better - they get hit by octopus, but can steal life from devilfish - but you should be very cautions how you handle them - on impossible level your limit of ghosts jumps over 100% leadership - and they will fight you instead)

I used thorns + ghosts nearly always when fighting octopus... (2 stacks ghosts, 2 stakcs thorns... on shooter) - if you are lucky - you can get some cool shooter like alchemist (only 3 hexagons range, but in that battlefield it is very usefull) or canoneers (creepy fast)... or when you already have undead in army - use skel archers...
Don't be afraid to use any archers - even human - even if you are not paladin with "tolerance" skill - -20% is not that bad (in normal HOMM you would lose control over them - they would lose turns in combat... having lover att/def/critical is not such big deal)
Archmages can cast shield - but they don't deal such nice damage on shooting.

@YENKO

Actually you can start visiting the Dwarf domain and Demonis once you have the mine access. Just take the moving platform outside the castle and leave Baron Ahoy (spelling?) untouched if he is too strong.

Yes, neither killing the Kraken or the mine castle owner is needed. Actually you can sneak all the way into the demons lands without any battle - of course a lot of patience is needed to lure then enemies and then run away.

Did you know? You can go back to king Mark and tell him about price for map, he will give 5k g and say that all what he can give. Yey free 5k g :P