linkingBook: I just started playing MM3. Getting my arse kicked by moose rats and those green things. Orcs are dead in two hits, but they usually take out my cleric or sorcerer in one hit. I can't defeat anything and my character attributes are fairly high.
Outside the city try taking out the goblin hut a few steps to the southeast and then go in a circle north to the coast, then follow the coast west, kill some more orcs, drink from a well to get a temporary bonus to [I don't quite remember - either armor class or hit points], follow south to an orc hut which you can destroy, then west and north back to the city. this should give you enough experience to get your characters to level 5.
See to it that every character is equipped which a ranged weapon [preferably longbow which does the most base damage] - every character that can use ranged weapons. Also, buy the most important early spells, like Cure for clerics, Light for every caster, Elemental Arrow for sorcerer (works quite well againts the green bubble beasts). Take care to get weapons with good production elements ( -> avoid leather, wood, brass, glass weapons/armor, look for silver, iron, crystal, amber).
remember that characters beaten unconscious in battle almost always have their armor broken, making them more vulnerable to physical attacks.
Next step should be the dungeon under the city (by now moose rats and bubble beasts should be beatable), where you find vampire bats and goblins (both easy to kill) and silver skulls for the silver skull quest (always save bevor looking into barrels as many are poisoned). Each silver skull gives you 1000 experience points per character when giving it to the questgiver.
That should see you through, so you can reach level 7 shortly before finishing the city dungeon. At level 7 it is possible to defeat the rat overlord. Instead you could also leave frst the city and travel south, past the castle to a huge meadow full of orcs and goblins (and their respective huts) for lots of (now easy) experience points.
