Mastered the Demon Wall Nightmare after quite a bit of S/L, but with my original strategy/team, which was:
P. Cecil // Protectga + Lifesiphon
Cloud // Drain Strike + Pound
Bartz // Drain Strike + Dismissal
Steiner // Drain Strike + Armor Strike
Lightning // Drain Strike + Lifesiphon
Shout as RW.
Turn 1 involved popping Shout & Protectga. From there, everyone would then hit with their slot 2 ability unless they got hit for damage that required them to Drain Strike. Cecil had mega health thanks to his +300 HP from his SSB weapon, so I just prayed for RNG that didn't hit him so often, as I had no means to heal him.
Once the arms appeared, anyone trapped inside their reach would attack the body, while those outside would focus on one arm. You really have to pay attention here to catch the turn ticks for Demon Wall, because after 3-4 the arms will switch focus and that will mess you up. If you accidentally target the wrong thing, or worse target the right thing but mistime it so Demon Wall shifts the goal posts on you, it can ruin a run. One thing that's nice is the person in the middle of the party will always be in the arm's grip regardless of position and thus always be resigned to attack the body. For me, I dropped Bartz into that slot - with Dismissal, he was delaying turns for the body, protecting me from a tiny bit of extra damage. Throughout all this, I'd alternate between drain and normal attacks as necessary.
Once one arm was down, the Demon Wall was at around 1/3 health. I gave it one more comfort turn to be safe, and then I began to pop all the Soul Breaks I'd built up throughout the battle - 3x of Lightning & Cecil's SSBs thanks to Lifesiphon, and 2x of Steiner's regular SB Sword Art & Bartz' Lupine Barrage. While in doing these attacks recklessly I invited a few gravity counter-attacks that I'd spent the first half of the battle avoiding, I nuked the rest of his health so quickly with this method that he couldn't hit me to actually finish any character off (though god, Cecil came close), which he of course has to do because Gravity can't kill. Nobody had any health when he died, but I basically wiped him out in a very reckless 1.5 turns. I probably had some good RNG luck here too, to be honest.
Just posting this strat in case it helps anybody else.