Xykon is an epic-level lich optimized for combatting wizards, in his lair with help from high level minions.
V might have had raw ultimate power in sheer spell slots and caster level, but neither the experience nor the saving throws, magic items etc. you'd expect from an epic caster. And had already lost the most powerful third of said raw power as well has having used quite a few high level spells already. Teleporting in blindly (which tbf, is a tremendous tactical advantage of the spell Xykon has cast on the city) without preparation, backup and experience, V was always going to lose that battle.
That said, I still think the order of the stick can beat him down the line. If they can choose the time and place of battle to isolate him from his minions, enter battle buffed and planned and acquire some sort of spell or magic item that will disadvantage him somehow, they should be able to defeat him. He can't mass energy drain the party after all.