The action was so fast-paced that I forgot to take screen shots as the battle progressed. However, here is a view of the scene when we stopped for the night, along with captions explaining various situations around the battle map:
Lareth began by casting Hold Person, immobilizing both the Fighter and Thief. That was the first and only spell he has (so far) successfully cast.
The Lieutenant began firing his long bow at the party Mage, but rolled horribly (as the DM, I do open rolls). The party Cleric responded by casting Hold Person and, of course, the Lieutenant failed his saving throw.
The party moved into Lareth's outer chamber and one PC quickly dispatched the now-held Lieutenant. Lareth attempted to cast another Hold Person spell, centered on the Cleric but, amazingly, all affected PCs made their saving throws.
The Mage attempted to Web Lareth but his phylactery magic item prevented it from having any effect. The Halfling threw a flask of oil, but Lareth simply moved out of the space (and through the ineffective webs) before it could be lit.
The party Cleric jumped up onto the trestle table, to engage Lareth in melee. He responded by casting Cause Disease at the Cleric. Of course, the Cleric made his saving throw.
Lareth shouted an offer to the PCs: Join him, and he would give them power and wealth, as his new Lieutenants. The party Halfling paused and asked for more details...
Spugnoir, on the other hand, had heard enough. After being more or less ill-treated (especially by the Mage) since joining the PCs, he decided to throw in with Lareth. His first action was to cast Sleep at the remaining PCs. In my game, one house rule is that the targets of a Sleep spell are allowed a saving throw to avoid the effects. Predictably, every PC who was required to make a save was successful. Despite his pleas for mercy, Spugnoir was quickly cut down by the Dwarf as a reward for his betrayal.
Lareth used the disruption caused by Spugnoir's actions to cast another spell. Again he cast Cause Disease at the party Cleric. And again, the Cleric was successful with his saving throw.
In frustration, Lareth decided to give up trying to cast any further spells and engaged the Cleric in melee. First round, the cracked the Cleric upside the head with his Staff of Striking and knocked him down to only 3 hp remaining. The Cleric shouted for the Dwarf to move up and help.
The Halfling made a half-hearted attack with a whip he carries, but also asked Lareth if he had any brochures he could look at, before deciding whether or not to join with him. I said, "No, but he does have a website and you can also follow him on Twitter."
And that is where we left off for the night. Although Lareth's spells were mostly a miserable failure, the PCs are also depleted of any more offensive spells. Meanwhile, Lareth is largely unscathed, has a formidable AC, and can inflict serious damage through dual-wielding his mace and staff. Although things look grim for him, the battle is by no means finished.