My immediate advice is to come back later, with level 6+ or so. That's what I did (my party had levels from 7-8 and I still found the encounter challenging). You do have more than one savegame, don't you?

That's a fight that was misplaced a bit in the game in that it was available too early. And the rats are way too intelligent and powerful for their level, as they always attack the weakest party member first. They produce wounds quickly and if one of your characters gets 5 wounds, they die.