Is to make a barrier around Graendal's palace, so that she can't Travel away. This seems to be possible, because the Lightside even considered to make a barrier around SG with the Choedan Kal.
After this, Rand could go in through a little hole in the barrier - maybe with some additional troops - and smoke out the enemy.

Of course, to simply balefire the whole palace is easier, even if innocent people are hit.