Part of the problem is that there are many things in this game that can make the master quest easy, and it's not guarenteed which (if any) you have any chance of accessing.  The Mana Blast spell you mentioned is quest-given, meaning the quest can't be designed with the expectation you have it - yet it vastly reduces the difficulty.  Availability of shards, availability of high-power monsters to increase your xp, availability of certain powerful quest items or drops, are all things that vary widely per game, and can be the difference between a quest being incredibly easy or incredibly hard.  Add in the fact that you might commit to doing the quest, and if the end boss is too difficult, you get stuck having to grind a bunch of levels just to get your win.

My suggestion?  To adjust for the varying strengths of Master-Questing armies have Waerlaga start out very strong, but add in armies on the strategic map (dragons, perhaps) which can be defeated to reduce that strength to something that is still tough, but more manageable.  To prevent an underleveled sovereign from overcommiting, you could have the initial dragon statue "test their worthiness" by combat.