Following an exchange on how to improve Combat-Rules, Dominic Pelletier 
(bearclaw@telus.net) and I came up with the following quite interesting rules:
 
ENHANCED COMBAT RULE:

When a combat or psychic combat begins with any carded enemies (i.e.: NOT
other players or enemies printed on the board [Sentinel, farmer at the
tavern, etc]), the fight must continue until either
1) player is dead
2) enemy is dead
3) player successfully Flee's.
Each round of the combat (or psychic) takes up one turn.

Escape is possible after the first round of combat. 
To attempt to Flee, the player fleeing must declare his/her intent before
ANY dice for the combat are rolled.  Fight the combat as per normal.  If the
player wins, ties, or loses by only 1 point, then he MUST roll for movement 
as normal and leave the space (The enemy remains unharmed).
If the result it a lose with only 1 point, the player still loses a life but 
is still able to flee. If the escape is not successful, the player 
simply loses a life and must continue the combat in his next turn.

If a player is killed by an enemy, all gold, objects and followers become
the Treasure Horde of the enemy card.  In addition, the enemy also gains 1
life in addition to any other benefits that card may insure with a victory
(i.e.. the Lich).