I think the game gets harder if you lose, with the blacksmith you craft the Ruby Knife, if you don't have ruby you get them by fighting Noo, you can also craft some whit materials that Noo gives, at night in sentinel town behind the pawn shop there is a drug dealer, buy the expensive drugs and use them before the battle, you should be fine with that, if you don't want to go through all that use a save editor and upgrade your stats, not levels, levels don't make the game easier they just make it harder.