Thanks to all for your input and advice! I finally did finish that quest and got the crown. I followed the first piece of advice which was to knock the game down to novice level - going to reset it to default, don't want the game too easy! Sadly, this character does not have a high sneak skill and I was low on potions after going through most of that dungeon. Her primary skill is two-handed with decent destruction and healing magic, though no time to heal once the draugrs were activated.
Here's how it finally went down:
Used a bow to shoot the dead jarl to get the other two draugrs out. At novice they were both scourges and the Jarl himself a deathlord. I had three Stormcloaks left at this point. I started using my battleaxe first but got disarmed. Used Oakflesh and flames for the rest of the fight. Had to keep backing up to stay out of arm's reach but eventually took them out. Only the main stormcloak survived ( can't think of his name atm). Oh, and a resist frost potion was helpful too! Fortunately I had enough apples to restore a modicum of health during the fight and a few restore magicka potions - back to the alchemy table pronto!
Am wondering though, do poisons work on the undead? I mean, if they're dead it's not like you can technically kill them again, just destroy the body.
Anyway, thanks again to all of you, I was appreciative of all the advice and enjoyed reading your posts! Now I need to take the Jagged Crown to Whitrun and go find my horse...again!
» Wed Jun 06, 2012 10:32 am 
If you get high enough (I know a lot of people don't want to get to the 40s and 50s and that's fine.) you'll see Deathlords in place of Scourges and Wights and maybe even Restless'. Then at the end rooms you can have multiple Death Overlords. 
I'm pretty sure I've even seen Death Overlords roaming hallways in place of lessers. 
