gottaride: I'm having a problem with this also - in my case it's not one of "difficulty" per se, but rather that I'm getting foes beyond the correct level. I've played this a number of times over the years, and it's never been like this. There was always a certain type of creatures that you'd get depending on where you were and the level the characters were.
Now, I'm getting EVERYTHING. I just transferred in the party from Wiz 6, and I go 6 steps and hit NASTY stuff. I mean, high level foes. I've even seen rocket girls, which normally aren't encountered until late in the game.
Wassup?
Wiz 7 is area scaled, and some areas are much harder than others. Try an easier area.
New City and most of the surrounding area is quite easy.
Old City is too tough for new characters.
The road to Orkogre Castle and the Castle itself is relatively easy. So is Munkharama.
But overall Wiz is quite difficult in the beginning.