I beat this with the forum user Dain Ironfoot this weekend. We actually went pretty far the first time, playing blind without either of us seeing the encounter cards yet, and then beat it our second once we saw our strategy. We used the heroes Dain/Ori/Nori and Aragorn(lore)/Frodo/Glorfindel(spirit) and the same decks for bboth attempts. Some quest spoiling ahead:
We found the key was to always quest as heavy as possible every turn and we basically didn't even think of attacking Smaug until the second quest step. At that point, every damage on Smaug went to extinguishing Lake-town instead. At one point, Lake-town had 49 damage and we brought it back down to Maybe five or less. We also tried to knock out as many locations as possible to the point where we had over 50 points in the victory display. When faced with the option of having two locations, due to Fisherman's Dock, we almost always took it.
We almost always had the first player engage with Smaug in order to keep his threat out of the staging area. I played with Dain who had some shield boost attachments, and was made sentinel by Arwen to act as defender for both of us so as not to keep killing allies. The other player used Frodo and his ability when Dain's defense would not have been enough to keep him alive.
Once it was time to attack in the third quest step we left Smaug in the staging area half of the time so I could optionally engage him when I wasn't first player. I focused on attack while the other player quested. I was able to do pretty hefty damage with my large number of dwarf allies, but since the Old Thrush was on Glorfindel, I think it was the other player who put the finishing touches on the dragon.
It is an awesome quest! I love the unique strategy that is required and will definitely play it again!