Once you have all four Gems and a Time Machine, all you have to do is Board it and you will enter the battle with Mondain. This battle takes place in a one-screen battle zone with a few special rules. Blink will teleport you around randomly, while Kill won't function and all and appears to make Mondain stronger. Magic Missile is your most powerful offensive weapon assuming you've maxed out your Intelligence and have a Staff or Triangle equipped. Otherwise, a Phazor is quite effective.
Either before or after killing Mondain, you will need to destroy his Gem of Immortality. Doing this will take a hefty toll on your hit point total, so you may as well get it overwith quickly and spare yourself the embarrassment of dying in the act later. To destroy the Gem, simply Get it. (If you kill Mondain before destroying the Gem, he will return to life, but in a weakened state that allows you to destroy it then finish him off again easily.)
Actually fighting Mondain is not much different than fighting overworld creatures at first, save that he has a ton of hit points. His spells have a range of 3, though he doesn't seem to need to cast them on the usual angles. Psionic shock and magic missile simply deal damage, while mind blaster reduces all of your stats. There isn't anything you can do about either, so keep pounding away with the most powerful attack you have. Note that, aside from Mondain's attacks, the random spurts of fire in his lair will occasionally damage you as well.
Once he's taken enough damage, Mondain will turn into a bat and run away. He will turn back if you leave him alone for a while, but there's no advantage in doing so. He will always move directly away from you on both the X and Y axis if possible, so it's very easy to chase him into a corner. If you're in the same row or column as Mondain, he will randomly move in either direction to get out of that row or column. Fortunately he does not take obstacles into account, so if you move into line to attack him while he's already up against the wall, there's a 50/50 chance he will simply stay there. Use this fact to your advantage to keep up your assault, and he will eventually fall. Congratulations, you've saved Sosaria!