I've been admitted to the oracle and I'm on the next main quest. Party is Knight, druid, cleric, sorcerer. I've mastered several schools of magic on my casters, including light magic. I'm around lvl 40 (42) and have done the first round of advancement quests. The dungeons and areas that are available now aren't so much hard as they are tedious. I can clear a room or a hallway and then have to rest. Am I just under-leveled? Does the end game difficulty just tedium?

It seems as if you are just in some hurry to go through the game. Don't hurry, just relax and learn the world, explore it etc. Surely it isn't as handholding as most of the modern games with level scaling, which can be completed wit closed eyes.

Corlagon's Estate should be easy for your party levels now. It contains quest objective for reaching second promotion of Sorcerer.

Cleric's second promotion barely involved any big fighting and takes place in rather small dungeon.

Druid's second promotion can be done without any fighting.

Make sure you learn game mechanics - about potions, altars, and such. There is nothing bad in just going back to lower level areas, which respawned, for more experience and gold. Make sure you use buffs (spell buffs and fountain buffs), try to be more efficient in clearing surroundings. Some people have "dps" mentality, so they waste all their Mana for maximum damage, so actually it takes them 10 times more to clear something than for those who use efficient approach.

Learn about stats, what they do. There are items which grant status debuff immunity, hp/sp regeneration, etc.

Edit: Also it isn't uncommon to finish the game at around Lv.100 (and it doesn't involve clearing respawns, just a thorough playthrough).

I wouldn't call level scaling to be related to handholding, particularly since there are a few games where level scaling can screw you over (Final Fantasy 8 and TES: Oblivion come to mind). I think one would have trouble completing either of those games, or Wizardry 8 (another challenging game with level scaling) for that matter, blind.

(There's also a couple older games where the encounter size scales with your level, but the individual enemies do not; this includes Might and Magic 2 (though fortunately only the first 10 enemies can act in a round) and Pool of Radiance.)

It's also worth noting that being able to be completed with closed eyes does not mean the game is necessarily easy or poorly designed; in fact, it may be a symptom of excellent sound design. Zelda: Ocarina of Time has been completed blindfolded because the audio design is good enough that one can use audio cues to get through the game.

Either way level scaling is curse. I used it as example, when game's difficulty is automatically adjusted to player, so he could feel free to ignore actual exploration and world. Initially it as used as means to let player avoid grinding and so he'd always had challenging fights. Which kind of totally defeats the very fun in RPGs. It was a figure of speech, I am not native English speaker, so perhaps it has some additional meaning in English language. Good thought-out RPGs became a very rare thing on PC, most of them are some watered down hybrids. Nowadays people don't like to explore game mechanics, to take breaks in big dungeons and such, they just want to go though it on the train. Or at least that's how current PC game developers see it. Thanks to gaming gods, that Japanese gaming scene still keeps the old RPG spirit intact :)

This isn't correct. There are plenty of enemies in the dungeon for the second Druid promotion quest. Most of the enemies aren't too bad, but there are far too many to complete the quest without fighting. You're fine. Dtgreene just ignored the figure of speech, instead taking the comment literally.

True, I wrongly remembered it as all being done on isle with big stones just in proper time of year/moon phase. However, the dungeon should be just fine for Lv.40+ party.

That's the first Druid promotion quest. I had to go back look it up to make sure I was remembering things accurately.

I agree that a level 40+ party shouldn't have much issue completing the quest. Just make sure the dungeon has been cleared before hand, so you don't run out of time fighting monsters on one of the day's the quest can be completed.

You're doing fine. The difficulty will definitely pick up. I'm doing a replay right now with all of the promotion quests done and two of the oracle quests so far at the same level you're currently at. If you were really focused on a speed run and didn't mind doing lots of portaling out to temples you could actually finish the game in the 30s or with really exploring as Sarisio suggests you could easily be well over 100