I'm playing on normal, and by the time I get to the second battle (that's a few seconds after the guy coming to fetch me), half the militia is already dying, including the mayor, and that's just with the first few undead. As there are still, what, 20 or 30 undead waiting to spawn after that, you can understand how I'm finding it impossible to keep anyone alive besides my own party.
The battle is much, much easier with healing, though.