Is this happening to anyone else?

I'm playing as warrior and just got to hell, the first level (13) is filled with nothing but blood knights and lava spitters. The earlier cave levels forced me to actually think what I'm doing instead of just hacking away, but lv 13 is just brutal. A single blood knight can kill me with two hits, and they seem to resist fire pretty well. The spitters are also a serious threat, and force me to use gear with fire resistance, instead of better stuff. I was barely able to cheese my way through the level and get to 14, which is apparently also populated with lava spitters and blood knights.

Wiki seems to list blood knights as "final knight class" -enemies, why are they popping up so early in hell?

Yeah they can appear at dlvl 13, it's normal. Enjoy your dlvl 13 i guess :)

They can spawn on DLVL 13 for some reason. Enjoy them because they can drop dragons zodiac rings.

I've seen it.It could be worse. You could be facing a ranged enemy that tries to maintain its range. Spitters are happy to face you in melee. Move slowly. If anything comes after you, back away to the nearest tactically advantageous position and fight it there. Use corners to block long range spit attacks. Avoid standing in spit puddles. Wear anti-magic, not anti-fire equipment. Fire resistance does nothing against acid spit, but magic resistance helps.How often do they actually hit you? You will get better survivability out of preventing them from hitting you than out of high health. What is your armor class? Are you using a shield? What is your effective dexterity? Are you giving them any free hits by taking actions that prevent blocking?Blood Knights resist fire, so they take 25% damage from it and cannot be stunned by fire. A high level sorcerer could easily wipe whole groups of Blood Knights using fireball storms. As a warrior, you're better off in melee. A well-placed fire wall to slow cook them while you work could still be helpful. They are "final" in that, of the four types of knight, they are last knight in the monster table and have the highest base statistics. In my opinion, Steel Lords are actually more dangerous due to their immunities.

Thanks for replies, just got past those levels. The next one had snow witches and balrogs and felt like easy mode =D
Getting through 13-14 was an unfunny slog of saving/loading.

Weird thing is, the monsters dropped gear that was just mildly better that what I was already using. Except for Veil of Steel, but that was a quest reward. During the entire game, I only got 2 amulets and 5-6 rings from enemies.

Still a sold game, though.

Well, the trick is to move SLOOOOOWLY. A step at a time. Wait til an enemy sees you, and let them come to you... in this case, typically one or two at a time. You can do OK this way. If you just stroll on in, you'll get swamped, though, no question about it.

What class are you playing as? As a Warrior, by this point, you should have good enough armor and weapons to engage one or two at a time, and survive... with regular healing and repair cycles. As a rogue, you'll want to just unload arrows into one guy as fast as you can, and then you may have to retreat to a known safe area while firing to take out the second guy.

As for spitters... again... lure them out so that they hit you only a couple at a time, if you can. One at a time is best, of course.

A key part of this game... so radically different from Diablo II or later... is that you have to go VERY SLOWLY. It's more "horror" than "action." It's a huge context shift from the latter games, where you are best served by rushing in and slaughtering as many enemies as possible as fast as possible (which becomes most annoying when you get to the overgrown jungle city). No, in Diablo 1, SLOW AND CAUTIOUS is the only way to play. Yep. Drops are not (unlike later Diablo series games) the main way to get "better stuff." Except, as you say, through quest-drops.

By that point in the game, I'd already gotten most of the really good equipment I kept from then on. I think I upgraded my helmet, but my armor, shield, and sword... well, I never gave up Griswold's edge once I had it... it's (in my experience) the best sword out there. I bought a magical shield from Griswold as well, and never (in my most recent two playthroughs, this year, on the GoG version) bought ANYTHING from Wirt, though he's known to occasionally have some really amazing items.

No, the "drops" in these levels are mainly useful for generating cash. By this time, you should be buying "elixirs" from the witch and the doctor as often as possible, to help you ramp up your stats, and should be stockpiling "potions of full regeneration."

I probably bought two dozen "elixirs of strength" and every time an "elixir of vitality" came up, I'd buy that too. Increasing stats, at the cost of 5000 gold for a single stat point, may seem expensive, but it really does help. I'd already maxed out magic and dexterity at that point, so vitality and strength were all I could "upgrade" by this point in the game, as a warrior. The "strength" ones took me from about 100 strength to 125 strength... which made a HUGE difference by the final level, swinging Griswold's Edge (with it's knock-back/stun power). Standing toe-to-toe with Diablo, I was able to kill him without his getting a single melee hit on me.