[Lobo13]

Sounds like you are doing almost everything you should. Couple of pointers.
First and foremost, death magic can be counter with the Uthgart belt or the upgraded amulet from Grimgnaw. There are a couple of other belts that confer similar protection as well. Belt of guiding light, etc.
Of course that means you lose whatever benefit you had from what was equipped in that spot. So think how you want to proceed and equip accordingly.
Morag always tries Death majic, so if you are protected, you can use this as an attack of opportunity.
Casting a protection spell such as acid sheath or other protection does additional damage to Morag or her hands when they attack. It can help more than spell mantle. Greater spell mantle, however, is also needed for the higher level spells Morag casts.
Since there are so much extra equipment in the game, you should be able to equip Daelan as well. He is a major asset in a fight like this. As long as he is alive and attacking, you have breathing room to cast.
Also, simpler is sometimes better. Have you tried attacking the priests with fire bombs, acid flaskes or gas? How about wands? Damage is not limited to the specific weapon they protect Morag against.
Summoned creatures or undead can also distract Morag and her minions.
It is a battle of tactics more than anything else. You should be able to walk in and out with your people intact. Even on Hard settings.