Not sure if you'll see this at this point Shipwreck, but I've been playing Demon Gaze and I had the same problem you did with getting to and defeating Mars(the demon you're talking about). It's kind of a bitch move of the devs to put that lava right before her fight and then have her create enemies that block your attacks on her. However, I had luck once I added a 3rd party member to my group by purchasing another room from the Manager(they start at level 1 though, so you'll need to level them just a bit and give them some decent gear). You can also heal yourself after you step on the lava, but it obviously uses your MP and/or items which you'll probably need during the fight. I wound up beating her with only the main character alive, but I finally did it. The next demon was much easier because after summoning her Mars does a bunch of damage when she attacks. To make things easier on yourself you can also change the difficulty by visiting Prometh in the basement of the inn.
Anyway, great show again guys.