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And boco ftw! Even though I don't mess with monsters, I keep one chocobo of each color in my party, AND Boco. even when he's 20 levels behind everyone and I've never used him, I keep him. :D Actually, I think I used chocobos in the goug slums battle b/c I'd sent everyone off on a proposition then saved. >_< stupid me... (was my first time through, don't blame me!)
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Anyway, for the mustadio level, I found it kinda difficult too. Just send at least one healer person over to mustadios side and charge headlong with everyone else. You'll draw their fire (the black mages and archers), hopefully take out the BMs early (silly BMs, they like to run up to the wall), and Mustadio just might take out a knight or two from the edge. He desparately needs help though. Agrias works pretty well IIRC.
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Well, what I did is this. I have a wizard in the battle and cast magic to one of the wizards. Then, instead of attacking Mustadio, the wizards will attack my, your wizard. I don't if this works all the time, well try it so you can choose the option to save Mustadio.
And also, sometimes Mustadio goes up the top, and when that happens, enemies can't attack him. Well, its just a matter of luck.