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If I'm not mistaken (I played it about 8 months ago), level 7 is where the mobs continually come out of several portals on the map and make their way to you about every 5 minutes. The best thing to do is stock up on strong mobs (vampires, mages, etc) and level them up to 10 through training and the battlepit. Build up walls & defence spikes in the tunnels that lead to the enemy portals so you can concentrate on getting about 15-20 level 10 guys. Then start massively stockpiling your mana, somewhere in excess of 500k, so you can summon your demon and have him run havoc when the main enemy portal starts unleashing the lvl 10's.
It doesn't hurt to drag all the bodies from all the 5-min waves to the jail cell and get skeletons, but the skels won't hold up agains these wave of enemy lvl 10s. When you think you're ready, save the game and unleash the demon guy with skels behind him and then your level 10s. The more mages/archers the better because your best bet is to pick them off, retreat, pick them off, etc all the way back to your heart. It's rough and they come at you with about 20-30 level 10's so I lost a few times. Good luck,