So here's the basic details...  Was doing Maggie's Ring Quest, went to the location and attempted to fight the wolf.  It defeated my Sovereign.  I received the message that he'd used 100 mana and was incapacitated for 5 turns.  Then, immediately after, I got a message that he was under attack, from the same wolf that had defeated him in the first place...  I hit auto-resolve, just to see what would happen.  The wolf proceeded to run about 10 tiles West, to a piece of empty land where apparently my sovereign was hanging out after having gotten spanked...

I got a message that my Sov had used 50 mana to escape, was out of commission for five turns...  And my nearby city was razed for what I can only assume is no reason what-so-ever...  Even stranger, I still have the Champion I'd recruited and the generic Observer I'd bought still alive, next to the now razed city...