Okay you know the part where the Red Dragon heals you? You can go there multiple times as long as you leave and come back so here's what you do
Search the entire cave for every weapon, including spot where you get launched to an Island.
Fight everything till you gain at least another level or 2. Just keep going back to the heal spot, leaving, coming back, getting healed fighting and getting levels. Once you feel you are sufficient level, go get healed finally and avoid all battles, just dodge everything
while fighting use no healing herbs or star lights etc. Just keep getting healed
the only way to beat them is to be a higher level.
Once you are there when you get into battle first move is to use Kyle and Alex's power up, have mia do a power up on alex, then kyle. Once that is done you can either use Mia's defense up on them or just use her ice attacks which work pretty good
With kyle and alex pick one dog and nail the crap out of him. Keep healing ready with Jessica.
Have nash do his multiple targer thunder attack, have mia use her single ice attack on the dog kyle and alex are hitting
with Kyle and Alex only use Dragon Slash (Alex's most powerful single attack) and Kyle's power slash on one opponent.
If you get beat bad, go back and get more levels
make sure you save before you fight the dogs
Levels is the key, in this game if you are not high enough level, you get screwed
"Dance with the devil, the devil don't change, the devil changes you."