raw looks to read: ranged touch att, and as has been mentioned ac 10 for size because it is smaller then a 5 x 5 square; partial cover is +2but for when more then 1/2 of the target is still see, I would say normal amount of cover is a +4 amount of cover.
But we are talking about improved cover which doubles cover bonus to +8 so . . . .
ac is going to be 18
now if our wizard here is say level 7 that gives a bab of +3 and if dex is 18, then a +4 then . . . . .
that gives a need for 11 to hit. not too shabby. Now the reflex dc will be 10 + 3 [spell level] + 4 [18 int] = 17
those in the tower now need to make a reflex save at +4 for improved cover for half damag if they fail and no damage if they make it
about the gernade effect: does not apply. it is a spell. not a thrown Molotov Cocktail of oil, not a flask of acid and not Greek fire.
MAGIC IS SUPPOSED TO TRANSCEND SOME OF THE LAWS OF PHYSICS.
if you want t screw with your casters, then when the readied archer that hits and breaks the concentration of the caster and screws up the spell, well, what just happened there? hmmmm . . . .
sincerely yours,
an evil b4574rd DM