I decided to cut to the chase and just take the last city from Magnar, with Magnar himself sitting outside the gate.  Unfortunately after I did this Magnars army became invulnerable for an indefinite number of turns afterwards (I think I tried 5 turns then reloaded and killed him first before taking the city).  What happened was that you could select to attck the Sovereigns army on the map, however the game would actually just move your army on top of the tile the sovereigns army is. 

The link to a saved game with this issue is below:

https://docs.google.com/open?id=0B8lBlL8TZwrWNTNaQlQ1ai1UaHlBeUNLb0VUNnJJZw