Was running this dungeon at level 41 while leveling. Mobs do way too much damage, often 2-3 shotting us with autoattacks.
Group ending up quitting at Karsh Steelbender since as soon as he goes under the lava and gets Superheated Quicksilver Armor, the entire group was instantly killed.
I’ve noticed that the scaling of Cata dungeons started getting wonky around level 35, but Blackrock Caverns takes the cake 
Yes, is this is scaled correctly. I’m leveling a blood DK through cata currently 36 and Karsh Steelbender is 1 shooting party members when dragging through the lava. If he is in the lava for 2 stacks its a wipe. I;m not sure how to fix this or work around it. 
You can skip him, but this is far from optimal.
When Cata first started, one trick you used on the heroic version was to have two people taunt him through it to make certain he didnt stop partway. The tank would pick him up, having him cross through. Then when it was needed again, a dps with a taunt would do so and have him brush through it. Then the tank picks him up again. Rinse repeat.
That takes a good tank and dps though, so it is unlikely to be fun to do with pugs.
Unfortunately, until it is fixed, there is not much that CAN be done.
I came here to post a thread on this very dungeon. Karsh Steelbender is clearly not working as intended. The very second(and I mean the very second) he touches the fire, like 3-4 party members die. This is not a l2p issue, that pulse flame is dealing way too much dmg with its first tick.
Looks like this has been fixed!