Wait a minute, at level 14 you shouldn't necessarily be clearing out the elven lands, still less the undead ones. Have you cleared out (and thus leveled up sufficiently) Freedom Isles and Kordar, not counting extra strong units that you might have left for later (e.g. the demoness hero in Taron Mines next to the king's son's castle)? Have you finished most quests to get the experience for level up?
Also, to remind you once more that just because something's in your path, doesn't mean you should (or can) defeat it. Try sneaking around, getting some quests complete -- like the Egnum the evilns eater quest that you get in the House by the waterfall place in Magic Valley, not far from where you disembark -- or recruiting useful new units. Have you got the Anga's Ruby artifact? It's a quest item, so you can get it in every game. Try equipping that and then recruiting some sprites, lake fairies and dryads and despair no more.
In any case, ditch those swordsmen right away and get royal snakes or some other superior unit. Take a boat and grab some free stuff around the elven lands (another possible replacement for swordsmen - emerald green dragons whose dwelling is accessible by sea only in the Valley of a Thousand Rivers).
This site has some good information on the game:
http://gamebanshee.com/kingsbountythelegend/
BTW is this your first time playing the game? If so, you really shouldn't feel bad as there are tons of things to learn and consider, which is one of the biggest reasons why this game rocks so much. I remember in my first game I came to complain to these boards that the demon lands were too hard. Turned out I had completely missed Ellinia and the Undead Lands (wasn't paying much attention to dialogues).
