Greypelt is not necessarily going to be a fighting encounter. There is plenty of text to show that if not immediately engaged in combat, Greypelt is just as apt to utilize these bipedal intruders to help him clear the rest of the complex which he has more or less claimed as his lair. The thing in the tower, around the rocks, in the sanctuary, all are threats to Greypelt, or at the least a threat to his minions.
As it happens, my PCs trapped him and two wolves in the two rooms by jamming the door. Then once they had cleared the rest of the complex, they went back. I decided Greypelt would threaten them but be open to negotiations. Once they told him what it was they wanted (enough mushrooms to bring them up to seven), it was a no brainer that he was going to make the deal. Greypelt does not know what level they are. Greypelt had also already lost several wolves (a random encounter out in the Vale) and did not want to lose any more of them, as minions of that kind are not an inexhaustible supply (or he would obviously have more of them). Even if he killed the PCs, if they killed even one more of his wolves, Greypelt is more vulnerable to other incursions. Greypelt is no genius, granted, but his instinctual nature knows that a wolf leader is only as strong as the pack.
Can it be a tough encounter to approach as one for combat? Absolutely! Too tough for a sleep spell, which I think you always have to design against for the BBEG of a low level adventure (nothing more anticlimatic than a snoozing evil genius). A tanglefoot bag would be helpful, for PCs who have pooled their cash and invested in one. Good damage dealt out in an opening round would certainly put Greypelt on his heels. I think, if pressed, it is the type of encounter where PCs really want to avoid combat but should be able to impress the creature that they are dangerous enough to be more trouble that they are worth.