Very simple.....
For anyone out there who's having trouble with this backyard battle, here's my hail Mary blitzkrieg strategy. On my first attempt, I killed him in 6 turns.
All four immortals around level 80 (though 60-70 is probably enough) with the following skills:
HP Up 1-4
MP Up 3/4 for Kaim and Seth
Mp Conservation
Auto MP Recovery
Reduce Casting Time 1 and 2
Double Cast
Ailment Resist
Persistance
Lucky Magic 0
Magic Counter
Counter
Counter Up
Absorb Attack
Absorb Magic
Black/White Magic Lvl 8
Spirit Magic Lvl 8
Complete Defense
Critical Defense
For me, Kaim and Seth both had 9999 hp/300+ mp, and Sarah and Ming both had about 6500 hp. I took Sed with me. A few things you should know before you start: a double casted Divide will be cast on the next turn, and a double casted Reversa will be cast on the same turn with Reduce Casting Time 1/2 equipped. Also, Critical Defense and Complete Defense can each be activated once per battle.
Now here's the turn by turn strategy:
Turn 1: All immortals double cast Divide. Immortal One will sneeze your GC bar. Your mortal can.. um.. defend.
Turn 2: Hopefully all your immortals double cast Divide before Immortal One's turn. This should deal roughly 65000 damage to him, and he should only be countering with All-Curse at this point.
Turn 3: All immortals double cast Divide again. Have your mortal heal any immortal who may have died or was damage by using items (this is when Sed can come in handy with his double item).
Turn 4: After a couple double casts of Divide, Immortal One will start countering pretty hard with Shadowus, thus reducing your overall Divide effectiveness. You should still be able to do at least 40000 damage to him this round if you're level 80+. Now if you get lucky, either this round or next, he will cast Cube on you. This brings all your characters to critical health (something like 100-300 hp), and your Critical Defense should kick in, making them invincible for 2-3 rounds. Your mortal should kick the bucket at the latest in this round, but you really don't need him/her anymore. This is the moment you've been waiting for; I think you know what is coming up..
Turns 5-6: All immortals double cast Reversa. You're invincible, so his counters can't touch you! This should do roughly 60000 damage _per round_ and at this rate, he should die in round 6 if you are level 80+. If you got screwed in the first couple rounds and weren't able to land a full double Divide (due to the Counter/Blocks/Absorbs not kicking in), or are lower level, Immortal One may still be alive. If that's the case..
Turn 7: If Immortal One is low on health (<30000), you can get gutsy here and go for another round of double Reversas, and hope your Complete Defense is still active, or that Persistence/Absorb Magic will save you, _or_ you can manually activate your Complete Defense on all immortals, giving you another 2-3 rounds of invincibility.
Turns 8-9: Double cast Reversa. He should die within these two rounds..
Turns 10+: If he's still alive, double cast Reversa and pray. Pray hard. Don't bother healing. If you can't beat him here, you probably should have been higher than level 40 to attempt this battle to begin with :)
Note: If Immortal One Cubes you on the 2nd turn, consider yourself lucky, as you have the chance to beat him in 5 turns, though that 5th turn will be a nail-biter if you don't want to manually activate Complete Defense!
If he Cubes you on the 3rd turn, cancel your double Divides and start blasting away with double Reversa.
If Immortal One doesn't Cube you, keep double casting Divide (if your health is relatively high) or you can switch to double Gambles and hope he will Shadowus counter you into critical health. The point is: get into critical health, get invincible, and Reversa! Good luck!
I found this solution elsewhere.
http://www.gamefaqs.com/boards/928334-lost-odyssey/45610510