I played with a group of people the other night (this being my first time) and I found that the co-op mode for this game is ridiculously tough. We lost both of our games with little going for us. However now that I have read the rules I not sure if we played it right. At the beginning of a players turn they would reveal an event card, if it was not an instant then all players did there buys and then the party determined which player was going to fight the enemy while the rest of the players that didn't fight an enemy could get cities. (after reading the rules I couldn't find any mention of that). Doesn't it supposed to play like the other modes where each player does there player actions followed by revealing an event?
The rules mention there stages in this mode but I don't understand what that means. (I was not the person running the game and it was already alot to take in).
As for the enemies some of them had text that said if this enemy is not attacked then it deals damage to your home (life points) but I don't recall all of them having negative effects if a player didn't attack them. In this mode can all players choose not to attack one or more of the enemies in play. (Maybe I am I completely lost and have no idea what I saying).
I just played this scenario for the second time last night (solo, controlling all four players) and won. It was quite exciting. But let's address your questions.
First off, yes, this game has an extremely hard cooperative/solo mode. The reasons are the same as for LotR, which I see you play. But this scenario is probably not the best scenario for a new player. It'd be like skipping Passage Through Mirkwood and starting with Journey Along the Anduin.
So did you guys reveal a card before each player's turn? If so, you are right in thinking that is incorrect. The first round should have no encounter cards. This allows everyone to get one turn to try to gain influence, buy new units, etc. After each player has had a turn, the first player draws a card from the encounter deck. If it is an instant, it must be resolved immediately, and once the card is finished doing its dirty work, it is discarded. Most of the instants attack each player once. After it is finished, players draw back up to 5 cards and take their turns, one at a time, in turn order as normal. A player should do all their buying and attacking before the next player's turn.
Which part of fighting the enemy vs. gaining cities did you not understand? You can battle more than once if you have enough cards for that. But this scenario is hard enough that you will pretty much use all your cards to attack or all your cards to gain a city. If the first player destroys the one enemy in play, the other players have nothing to worry about other than gaining cities/strongholds, acquiring units, and purchasing neutral cards.
The trick comes with how you were dealing with the enemies. As you mentioned, some enemies deal damage if you don't attack them. So even if the last player new he could beat it, he can't attack until his turn, meaning the rest of you have to decide whether you want to take the 3 damage, or risk using units to the attrition die in a battle you know you can't win.
But one enemy has a Resolution effect that causes all players to destroy a random unit from their hands. During my first game, I kept attacking it to avoid taking 2 damage, but everyone lost so many units by the end of the round that nobody could defeat it and then we were wiped out. This card is probably best saved for a player who knows they can defeat it.
Finally, stages. Each encounter card for this scenario has 1-3 gems at the bottom. This represents which stage it is in. Stage one cards are easier than stage four cards. When the deck is shuffled, all stages are shuffled separately and then stacked from top to bottom, lowest to highest. This ensures that the game gets harder as you play and prevents you from being annihilated on your second turn.
I hope that answered some questions, and if not, let me know. After reading my post, it sounds quite disjointed and I'm not sure I conveyed the information I wished to.