Just as a follow up - I've now completely scoured Elinia (with the exception of a walled off area) and killed everything without much trouble at all. I went from 33,000 to over 500,000 gold with this strategy, because I just wasn't losing many troops at all. Now I'm up to 1700 leadership with a team of:
2100 Lake Fairy
2200 Sprite
260 Elven Archer
420 Archer
210 Ancient Bears
Off I go to the Land of Death.
