That’s a great, tense spot for a high-level party — lots of narrative weight without having to end it in a wipe. You have several good ways to de-escalate this encounter while still keeping it epic and consequential.
The Aspect as a Distraction: When she releases the aspect of Obox-Ob, let it become the real threat. Maybe Iggwilv gets wounded, or forced to divert her magic foodle, and the party has to escape or even help seal it again to survive. They can still oppose her, but the focus shifts from PvP to survival.