You're referring to either Level 7 or 8. You do that in both levels, but in Level 7, you just take Gormagon's whole dungeon at the beginning and get a second portal. In Level 8, supposedly the Wizards scattered Dante's dungeon and so you claim rooms as you progress. So it's one of those two.
The intended strategy is to actually go out and kill Asmodeus by "sneaking" by the Heroes. But this level isn't very well designed all things considering. DKII is more intended towards casual and easy going players, where as this level is designed to be taken on in a more aggressive fashion. So it's pretty awkward and no surprise that most people prefer to turtle.
If I'm not mistaken, the Heroes always split their forces between the Player and Asmodeus. The real difference is that you're playing GOG, which has the 1.7 version of the game. 1.7 has somehow managed to break Keeper AI. It can no longer properly detect threat levels of Creatures, which it uses to be able to drop Creatures in response to enemy threats.
As a result, Asmodeus doesn't properly defend himself against the Heroes. Normally, he'd drop everything and they'd all fight it out, but in 1.7, the Heroes have an easy time as they only have to fight Creatures that just happen to cross their paths while wandering aimlessly in the dungeon. This ultimately results in the Heroes having absolutely no problem with killing Asmodeus.
It's been a while since I looked at the script of vanilla Level 10, but if I recall correctly, there's a special script that sets all the Heroes to attack Asmodeus if his dungeon is very breached, which is why they will attack earlier than intended. When you think about it, this is very very silly. It's one of the reasons why I said this level isn't very well designed.
Try focusing on killing the Heroes instead of killing Asmodeus. Then there will be nothing left to invade Asmodeus. Attacking from the side should also bring you victory, as the Heroes won't be able to reach Asmodeus' Dungeon Heart before you kill it. Unless you're doing something wrong or Dungeon Hearts take longer to destroy in vanilla than I remember.