I didn't bother reducing the encounter because I thought they would use the terrain (such as the well) to their advantage. ONE guy (I think the thunderwave wizard) tried it ONCE. He hit three guys towards the well, but only managed to knock one in. He didn't bother after that, instead tyring to create ill-timed openings.
The rogue (way late in the battle) opened the door he was adjacent to (minor action), shifted in (move action), and then closed the door behind him (minor action).
The battle could have been easily winnable if they had pushed a few more skeletons down the well and/or retreated through a doorway (then the party could deal with the two wraiths and only one skeleton at a time instead of the wraiths and all 8 skeletons. Hell, they all could have retreated into a house and clsoed the door behind them, leaving only the wraiths to deal with (since they can fly through walls).
Instead they made it much, much harder on themselves by adopting the v3.0 fighter philosphy (just stand there and pound away) and wasted TONS of resources which they will surely need later on. The damned wizard didn't even bother conjuring up her flaming sphere until she was almost dead!
And they still got two encounters after this!
After reading your initial post, I had to wonder.
After reading this further expansion, I can confidently say the following:
Don't feel bad because your players are tactical morons.
I mean, killing a party member to prevent having him raised, when you could just shove a healing potion down his throat or let him use his second wind if he's still got it through a Heal check, is both selfish and short-sighted. Two traits that seem to define every member of your party.
There is a solution. About round 3 of a fight that's turning into a TPK, take off your DM hat and talk to your players like you were a member of the team. Hammer out a plan with them, then encourage them to act on it. Then resume DMing, ignoring your OOC knowledge of the party's plan.
It's not a perfect solution (and you may already be doing it), but it can help.
If they ask you for input, a couple fights later on, then give it in a similar (if less detailed) session. Once you feel they've had enough examples handed to them, tell them to think of one themselves (giving some help if they need it the first couple of times). Eventually, it will beomce a habit with them and you'll stop seeing crap like this.
If they don't ever ask you for input in later battles then merilly slaughter the moronic band of adventurers, performing Natural Selection upon the denizens of your fantasy world.