If you plan on going the more difficult route thru the southern part of the forest and the area south of it in order to bypass the Elder Wyrm, the enemies you encounter are at a too high of a level for your party to fight, so you should just flee. You can flee with one ally in your party at a time. You can unequip all weapons so they won't have to draw and sheath them. Keep all shields on, though. If one ally dies, switch in another one. Full heal right after you enter the next zone.