I've been trying to clear this for almost a week. After doing the initial clear, I went back to figure out how I did it exactly (as I needed to farm 2 more copies to break the magicite level cap.
So, it turns out that, the crucial key to victory in this fight, is to let one of the guy stay paralyzed for phase 2 turn 5, as to avoid the back-to-back Earth-diffusion.