I don't know about the original Diablo (never played it), but in Diablo 2, the whole deal is that there are some areas that are simply too tough to get through unless your character has increased enough in strength and abilities.

The whole idea is that you don't blast through headlong and try to go straight to the "end" of each area as fast as possible. This gets you into situations like the one you describe, going up against overwhelming odds.

Asssuming Diablo 1 works like Diablo 2, what you probably need to do is backtrack and kill more of the easier monsters and pick up more treasure and items. Get your character built up a level or two so that he doesn't die quite as easily and has a little more power to his weapons. Then go back and try to kill the monsters that were too tough before.