Maybe the next (or only) remaining city does not have enough room for all the defeated heroes?  It may be there needs to be some other place to put defeated heroes if the next city does not have room for all the defeated heroes and sovereign.  See the attached save.

http://dl.dropbox.com/u/8710134/LotsOfHeroesInCity.EleSav

EDIT: I was able to get past the above crash when I defeated them another time.  I don't think there were too many heroes, and maybe regular troops are booted out of a city for immobilised moved heroes.  However after defeating their last city, it seems to crash when saving or ending turn.  This may be to do with a bug I found - one hero was able to have turn after turn, and I was able to cast Storm as many times as I wanted, wiping out stack after stack.  I think the game had a bug where it takes a long time to move to the next unit, and for some reason it was still accepting my spell commands repeatedly.  Save here:

http://dl.dropbox.com/u/8710134/Markinn%20077%20Eight-24.EleSav