Opium I tried your friend's setup and had the same result. I did about 1 damage to Gorgon ad 7 damages to the final guards. I tried removing the accessories(Necklace of J and Nauglamir) with the same result.After a while I unequipped the stone mask and I could do normal damages again. Darkwzrd4 is right. It's the stone mask.
It's supposed to boost Intelligence and Defense. It's not supposed to affect your attack power though. Is it a bug or something? Or are these enemies strong against some element that might be present in the Stone mask ? If you look at the bestiary you'll see that the Gorgon is strong against Fire, Stone, Cut and hit. The final guard is strong against Cut ,Fire, Ice, Thunder and absorbs Dark. Not sure which one is added by the Stone Mask, but either way at this point of the game you better use the Dragon's helm or Wizard hat. They're by far the best head gear you can get in the game. Hope I could help.
Btw I encountered this problem while playing the Japanese version.
EDIT: OK so I tried equipping the stone mask with Muramasa and i could do normal damages. It's not the stone mask. These enemies are strong against Cut, so any sword like Crissaegrim or even Rune Sword won't do much damage. The final guards are immune to Fire. If you equip the Firebrand it makes a clinging sound and the word Guard appears on the final guard. Again at this point of the game it is better to equip stronger armor and weapons and a ring of varda if you have one , if you don't want to spend too much time on those enemies.