Josie is tough, but cursing her with the cumulative Curse Skill (Survivor path, no resistances against this one) and then polymorphing her into a bunny makes her easy to deal with. Use Banish on her Death Knights and if you're blinded (shown by a small white eye icon on your char) just run out and wait for the spell to wear off.
Josephine summons a death knight first, then casts a spell on it, then casts Blind... in that order, without skipping any steps. If you interrupt her spell (maybe try Flash Attack, if you have it), she will keep trying to complete the summoning and never move on to casting Blind. As a warrior, with a sword and Stun, Raze just ran up and whacked her right after the conversation ended, and didn't loose a hit point.
Do you have Curse? A few casts of that before switching the Elemental Hail will make the attack much more effective. You can drink a shadow potion if Josephine casts Blind on you, to wait for it to wear off. Area effect spells that do not require a target (Hell Spikes, Elemental Hail...) may not turn you visible (don't know, never tried), but even if they do, they will work when you are blind. Blind / Hell Spikes works well against Josephine, if you get her first, or survive until her spell wears off. 4 quick curses (level 5), freeze (level 4), 4 leeches (level 5), one hellspike (level 5).
If you have a spare skill point, level 1 of the survivor's Deadly Gift combined with a couple scorpion traps would make it an easy fight. You can run out of the room after releasing them...