has anyone played with one core set and 4 players,

I am tempted to try this with the wife`s friends (if she doesn`t kill me first). But I am first thinking about the logistics. Everyone gets a mono deck and one Gandalf. If you draw too many encounter cards can`t you just reshuffle the discard pile back into the normal pile and keep going?

Yup.

I tried the 1st quest this way and it was stupid easy. But then again the first quest is always easy, so that doesn't reall say much.