Final level solution...First, focus solely on economy: build Windmill and Keep immediately, then Transport, Chancel, Alchemy, Castle, and Market in that order. (While saving up for Alchemy, some footmen will start banging on your gate. Don't retaliate, since the enemy will spawn stronger units once that first wave is wiped out!) Then develop your military infrastructure to allow for 16 upgraded Generals and 2 upgraded High Priests. Build/research Barracks, Monastery, Aquaduct, Spiked Blade, and Ankh, but don't train units yet--just sit there and save up gold. Once your city falls below 300 HP, start spamming Generals! Attack until the first wave is dead, then Fall Back and train 2 High Priests while waiting for the rest of your Generals. (A second wave of enemy units will arrive in the meantime; Attack them until dead, then Fall Back.) Once you have a full army, click Attack to start the final assault. Keep replacing any lost Generals until the enemy city falls.
For those having trouble with hard mode: Try using Sacrifice Builder/Recruit/Mage cards to ruin the AI's production, Thieves to keep the AI poor, and Magic Defense to buy time to do so. It may take a few restarts, but if you can destroy the AI's economy, it'll have to discard all those Dragons, Trojan Horses, and Curses while you leisurely stroll to victory.
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