Your absolutely right Psychotic. Actually, I was about to ask about the difficulty when I released v2.2, but now I know to tone it down before then. Hopefully it will be more manageable in the next version.
Oh, and sorry for dying on you.In v2.2 I've thrown in a spell and potion for reviving your allies.
Not sure why I didn't think about that earlier...
EDIT: Just got done going through everything and toning it down. The next version will be easier in the following areas:
All enemies stats have been lowered by as little as one-sixth and as much as one-half.
Item and equipment costs are lowered.
Encounter rate lowered significantly.
Weapons recieved a boost in strength.
Able to buy Pump Up Potions (Life Potions) from Giga Guess in Cid's Headquarters
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In v2.2 I've thrown in a spell and potion for reviving your allies. 
