I had that problem with Nameless Island in my first game: the great ship 'White Shadow' was parked right at the entry point for the longest while, and it kept reading as 'Impossible'. Every time I moved to the island I would see these great hulking hordes of undead and remember why I wasn't going there, then hit reload and travel somewhere else.
Then I had a change in tactics, went back... and cleaned their clocks in like three rounds. Still reading as 'impossible', but doable.
Maybe you have the resources to beat it after all?
(Note that 'resources' may very well mean, "NOT filling all five troop slots at full, but instead taking fewer troops--maybe of a different kind than your usual--and using different spell/dragon action combinations.")
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