It makes sense that someone started dispelling the illusions. The cavalry can't function with the illusions up, and as long as the cavalry's hemmed in Taldor fundamentally can't do any better than killing whatever comes at them. But they're doing it across the river. There's no magic Iomedae's ever heard of that can get a horse across the river without the horse having been specially trained to handle an Air Walk. 

- no, this is straightforward when you add the premise that the gods are with them. Someone (Arazni?) is dispelling the illusions; therefore there is a way to get the horses across the river. Probably Arazni has a spell to get the horses across the river. The poor cavalry commander whose forces are closest probably hasn't realized yet, because he doesn't know the gods are with them in any sense other than the sense in which the gods are always with them.

Iomedae flies down with her sword glowing brightly. Conveniently for her this cavalry commander is caught with a barbed arrow on the shoulder right as she approaches and she can tap him and heal him. "There's a wizard who can get the horses across the river," she says. "Get everyone ready to charge once it's cast."

Iomedae probably shouldn't use her tiny sparse sprinkling of godhood to save Arazni one message spell but who among us is responsible with the first sparse sprinkling of godhood, really. Anyway she is correct. When the land across the river is clear, one more Holy Word to take out the skeletons and zombies in the water, and a Wall of Stone to build a beautiful bridge across the river, and another Wall of Stone to make it wider.

The essential problem with having an escape route is that you have an escape route. When enough of the fog clears that there is a way across to the opposite bank, a way wide enough for the horses to ride across it, and the cavalry is gathered to cross it - that's when the battle might be lost then and there. It's so much safer, to be on the far side of a solid stone bridge from your enemies.

The entire army buckles.

Ah, this young officer has just made it to his commander, who's just gathering the cavalry. He'll whisper in his commander's ear, heedless of the young paladin who just healed the general's shoulder - "You must realize all is lost! Flee with all you can save!"

It does look like it, doesn't it? He gathers his horse -

Hang on that’’s kind of suspicious - 

Greater Dispel Magic.

The young officer is now a skeletal lich wearing a long descending cloak that falls like water over his shoulders, a cloak made entirely of mirrors, nearly all of which reflect the lich's form.

A very fast Mirror Image and a Teleport and fly straight up?

She’ll counterspell the Teleport.

Smite Evil. Die. If she fights with her eyes closed the illusions can’t trick her.

Plane Shift to Nirvana, Plane Shift to Nirvana-

Miss, miss, shouts of alarm, dodge, hit, dodge, hit, that's a soul lost, that's a soul lost - 

- The Mirrorgrave is now an elaborately carved statue of himself. His cloak is also an elaborately carved statue of his cloak.

Iomedae will cry out triumphantly on the assumption Arazni knows an undead affecting Flesh to Stone. “Attack!” she tells the cavalry commander. “They’re headless! We’re winning! Our wizards have given you a way to get in the fight!”

And then she’ll repeat “they’re headless, we’re winning, attack” over and over very loudly because communication on the battlefield is hard and you have to keep it simple.

(Arazni doesn't know an undead-affecting Flesh to Stone but in fact the commander of this army is in a carefully designed mostly-antimagic demiplane so it's not false, and Iomedae is very persuasive and should not be interrupted with clarifications.)

She'll keep dispelling illusions.

Meanwhile, on the other side of the battlefield, a fourth-circle wizard is having a bad day. The trap that anyone with any sense knew Second Army was walking into has been sprung; She lost her race against time and will be a casualty instead of a questionably-criminal deserter. Half her fourth-circle spells are reserved for scrying, one of the remaining two is confusion which is no good against the undead, so really for all practical purposes she's a third-circle wizard with one wall of fire.

After a herd of zombie elephants run through the lines of the formation she's attached to, she's just a third-circle wizard.

After ten minutes of fireballing and a few dispels, she's just a second-circle wizard.

And the cavalry will ride out across the river, shooting volley after volley of arrows into the tightest bands of the undead, focusing on living targets or particularly powerful champions. They feel a lot better now that they aren't trapped, which isn't to say they know what the next step is.

Meanwhile, the rest of the battle is ongoing. Gigantic dragons living and undead swoop over both armies, vast armies of reinforcements appear, entire adventure parties manifest in midair to make dramatic speeches, and in other words the illusion-duel that is the perpetual state of any major battle continues. Arrows go both ways, spears shatter and soldiers draw new weapons. Injured men stumble and fall and then there's a channel and they draw their daggers and cut off the feet of the undead over their bodies and pick up their axes and get to work. A dozen zombie giants smash their way through an infantry regiment and the undead armies follow in their wake, only to be tripped on Grease and ensnared in Webs and brought to crash down on their ghoulish servants before being picked off by the lowly foot archers. A vampire wizard with some kind of charm against the sun calls up swarm after swarm of spiders and scorpions to assail the soldiers, only to vanish in a sudden pop when whatever magic was keeping him sun-proof is suspended. A rotting winged horror ridden by a graveknight is brought down by a hippogriff-riding knight's charge, but the falling graveknight takes the hippogriff's head with him on his way down and they plummet together, dueling as they fall.

More and more of the soldiers of Second Army are starting to eye the bridge...

Iomedae knocks the statue of the lich over and smashes it to pieces with her shield, and then she stands in front of the bridge glaring down anyone who seems to be contemplating making a run for it. She does not want to kill soldiers trying to flee, but she will kill them, and because she will kill them they are all of them likelier to survive. It is one of those places where the concepts men speak in have the logic of the gods underlying them. 

Standing here making it clear they are absolutely not going to try retreating across the river doesn't actually take that much of her attention so she's spending the rest of it scanning the field, trying to figure out what's going on - where's Arazni -

Occasionally throwing out Dispels. Figuring out where to give the cavalry a way back across the river and actually into the fight. How about....here.

Eight hundred years in the future, armies will devise responses to the tactic "be charged by heavily-armored cavalry lancers." There will be good cheap bows, and pikemen trained to form square, and guns will be starting to come in that don't care how much armor you're wearing because they can put a bullet clean through plate, back and breast both.

Right now, the only response is close-packed heavy infantry with armor and shields and big spears with the morale to stand up to cavalry facing the right way, because it takes a genuinely exceptional horse to be willing to collide with a wall of spears. Normal horses who are not powerful adventurer horses look at that and go "nah, no thanks."

That is sort of what the undead are doing! They are closely packed and they have Being Completely Disposable as a substitute for armor and instead of morale

But they aren't facing the right way. Their backs are to the cavalry, and they are packed together to try to reach over each other's bodies to try to maul and devour the living, and they really aren't prepared to defend themselves from lancers..

As a result of this the cavalry do not leave line formation. They simply ride past in a narrow line, reach their lances out, skewer the nearest undead bodily off the ground, hurl them to the ground and then trample them before their hooves. Then they do it again further down the line before any of the people controlling the undead can realize anything at all is wrong. Their lances are fairly unlikely to break, because, you see, they are currently greater magic items.

This kills undead really, really fast.

There's undead cavalry out there. Rotten corpses on rotten horses, clad in the remnants of their old armor and wielding lances and shields, and their deathless captains will throw them at the knights of Taldor.

Being a knight is a skill, not a matter of equipment.

The undead horsemen go crunch.

There are plenty of free riders in Tar-Baphon's ranks, serving as sellswords for the King of Ustalav. Somehow they have very little desire to close with the best horse on the continent, in spite of their undead masters' threats.

As the fog clears (in sudden bursts, not an ordinary lifting) the Taldane troops can see the armies of Tar-Baphon.

They are, of course, outnumbered. They are greatly outnumbered. Mighty hosts lurk in reserve, great monstrosities larger than the eye can see, vast swarms of undead bats yet to descend on the battlefield, hilltops warded with palisades of bone and stone.

And yet the armies are finite. There are limits. There is a space beyond them, a space trampled by their march but that still has stubby grass growing out of it. They are not alone, isolated, in an ocean of the dead.