The Way Out is posible to win (edit: and perfect, see below)! I'm not sure how/if I can repeat it, but I've just done it.
Here's what did the trick for me:
Everyone strength 60.
Azra - Book of Blood, Book of Plague. All red maxed, last 3 spare points into pushback (so 4 total, 2.75 tiles)
Markos - Evni+, Traitor's Harness+. Swing, Smash, Lunge, Hard Knock, Stun Stab and Sword Training maxed. Last spare point to Cleave, making it 2.
Ketta - Warlord's Triumph+, Master of Archers+. Triple Shot, Rapid Shot, Spread Shot, Sharp Shooter, Ranged Focus, and Poison Shot are maxed. The last 2 spare points go to Black Out The Sun.
Note the poison bow and max poison shot - the improved poison is more powerful than Sharp Shooter even if the poison runs the full duration. The main reason is +10% base attack, but once you've got the weapon, poison becomes a useful skill.
I am unsure if Swing or Cleave is better for Markos, and I'm really not totally sure about anything with Ketta, but it all worked. I think no extra points in heal is correct for Azra in this case because you basically can't tank any attacks anyway. There is maybe a better choice for Markos's armor, but I don't have the skull for it yet.
So Ketta drops into that fairly obvious square that gives max coverage after boosting to 5 - she won't be moving again. She will be in range of a few ranged attacks so the armor is helpful, but maybe not required. Markos is going to kinda bounce around wherever needed to rip armor off and deal damage, but we are going to run out of PSI at the end so be sparing about the moves. Don't really bother healing him, but pull him out before the red armor enemies - Ketta will just have to hack though the armor tax. (Dragonfire often as well.) Although I did let him just die out 2-3 times, so it isn't the end of the run if you get nothing back from him psi-wise. Also - drop him at 3 boost against those reds if you are repositioning him anyway, let him rip a bit of armor that way.
The combination of the 2 books and the 3 red spells should get you though most waves without need too much lighting - which again, we're going to run low on psi, so sparing on the lighting. The big test is the Abominations. The first one gets covered over with a run of reds which means we can't get Markos in there - wait till it is around the turn back up to take it on. You'll need target strongest for a bit to make sure the Monstrosities all pop at nearly the same time (be liberal with the lighting here, phasing can ruin it!) and then either a crystal or dragon fire, and lots more lighting. Don't be afraid to use those spells just before the Abomination shows up though, it'll be alive for a while and should get back off cool-down.
Now right near the end I was almost getting overwhelmed with normal waves, and had to burn the dragon fire again to clear stuff out. At the same time, 2 Abominations are making their way down the map for a bit. By the time everything else is cleared out the Abomination on the top track is too close - while it pops, Azra has enough HP to take the 3 Monstrosities, so I just let them go. (I think it'd take a good bit more DPS near the end to get to the top track on fast enough.) Weirdly enough, I think you have to make sure you don't kill any of them, as their payload will do more damage than they do.
Now dragon fire is on cooldown, but crystal should be up, so the final task is to again break open the 3 Monstrosities on the bottom at the same time and crystal them. Thankfully that leaves them all a 1 hit kills for lighting, because this is where I was out of psi to the point where Markos could only be put up to boost 2, and so Ketta + pushback + lighting has to end it.
Now if I go get the best armor for Markos for this (make him last longer against attacks) and maybe only use him at 3-4 boost when he will be lost anyway, I think I could fix the psi problem. However, I don't think I can get enough extra psi out of the level to clear that last wave of enemies in time to start the top track abomination early enough, because then I can't burn dragon fire right at the end. It is all close, so maybe with enough trying we can tweak out my setup to get it done, but yikes is it going to be hard to find much better that can be done. And it'll be frustrating because the phasing sometimes ruins popping the Monstrosities on time (at least the longer extra pushback buys a bit in a pinch).
I'm going to take this Azra build against the other last few stars (ZA E, TFOM A and E, TGKWA A and E), maybe the very marginal TFOME won't be quite so brutal with this. (Or, more likely, it won't work at all, but meh, I'll find out.) At least Bakal will be available on the others, so I won't be starved of all meaningful healing. And TFOME would let me get one more upgraded armor... so there is a small chance of it being down to just TGKWAE.
Addendum - got the 60% resist armor, made a big difference. Almost managed to string the fire along till the end, but was getting swarmed at the end again and had to use it or take damage. Which then meant I was trying to kill the ending swarm with just one crystal, which isn't enough to kill all the spawns. Ended up losing due to trying - just can't get damage down fast enough when there is only like 3-4 tiles left. Had the psi, could have H-bombed... except don't have a book slot for that, need both the blood and plague to get down enough AOE without tons of lightning taking all the psi away.
I think it is possible, but requires timing out when to fire crystal and dragonfire to "clear trash" and still get them back for the final spawn swarm. I think I'll get it in a week or two if I don't get too frustrated.