I did get through it, but I think maybe Steam has allowed a bug to get in. When I press the button you describe, the west door in the "entry hall" becomes blocked again. But I did have the scroll, so all is well.
I didn't remember Snergle's Caverns as having quite so many dwarves when you finally reach his private quarters. Holy cow! There must have been over 100, all crowding in closely, preventing Fireball or bow skill. (I hadn't yet gotten Shrapmetal--which doesn't work very well at skill level 1 anyway!) I managed by repeated (and repeated, and repeated) combinations of Town Portal and Lloyd's Beacon, both at skill level 1. Of course, I had to make sure that I had gone to New Sorpigal immediately before coming to Ironfist. And of course, at one point I got so excited I SET a beacon instead of returning to it, which meant I had to get that straightened out before I could FINALLY complete the dungeon. But it allowed my party to go up two levels. Too bad nobody has axe skill, so I could take advantage of Snergle's Axe.
And now it's off to Castle Stone, so that I can show ol' Lord Stone that I have indeed cleared away the Temple of the Sun -- that Minotaur Lord was REALLY tough!