Local Enemy Bestiary
Begin by putting some new gear on Strago, as well as an Esper to let him learn some basic spells. Speaking strictly of Strago, let him abuse Aqua Breath in this dungeon whenever you end up fighting the six-Balloon formation. You'll fight enemies by walking into the mobile flames.
So, onto the dungeon. From the entrance, go north to the next room. Go north again to the next room. In this room, you'll find two doors. Go through the left one for a battle; through the right one to continue.
In the next room, go through the right door for a Flame Rod , or through the left one to continue forward. This room repeats the same idea, but it is an Ice Rod rather than a Flame Rod. In this next room, the hall, go forward and heal up, for you have a boss soon to come.
Flame Eater, Balloons, Grenades
The Flame Eater is able to use a basic attack, Hit (basic attack power +50%), Fire, Fira, Firaga , Fireball, Reflect, Protect, and Bomblet. This last one is unfamiliar to you; it signals the future coming of Balloons and/or Grenades. These monsters are unaltered from their usual selves.
Simple strategy here. Have Strago spam Aqua Breath . While this happens, summon Kirin with someone. If possible, also summon Shiva and another Esper (not Ifrit). Let Terra enter a Trance to be powered-up, and let Locke pretty much just Attack.
After the battle, head to the back of the house to find Relm. You get crushed by flaming rubble alongside her. Almost.