Stonehell is set up so that it's probably going to be a tough challenge for 1st level characters if they go in swords and spells a' flying and hope to kill everything they come across. In order to best meet the challenges of the dungeon, the party should be open to using their heads as much as their brawn.
One thing to remember is that many of the intelligent monsters down in Stonehell are not going to automatically attack the party on sight. I recommend highly that you use the Monster Reaction Table on p. 52 of the Labyrinth Lord rulebook when the party first meets the monsters, provided that the party doesn't attack them first. On a result of Neutral or Indifferent, the monsters might just warn the party off rather than attack. A result of Friendly might even indicate that the monsters are willing to reveal some information about the dungeon that may help the party in their explorations. Remember that characters with a high Charisma get a bonus to roles on the Reaction Table, so if the party has a character that’s particularly charming do the talking, they stand an even better chance of avoiding a conflict. If that character also speaks the monster's native language, I'd award another small bonus as well...
That being said, there are a few monsters lurking on the first level that have a good chance of eating the whole party should they stand and fight. The Giant Gecko Lizard and the random ghoul could easily tear through a party of 1st level adventurers, so they need to know that running away isn't always a bad thing.
There's more there that's good, so I'd recommend anyone attempting to run or explore an old school dungeon ought to take a look.
I won't be running Stonehell, but an original dungeon of my own design. I'm a product of the Silver Age, with a firm love for Gygaxian Naturalism. Part of this comes from my love of Harryhausen movies. I'm currently watching "The Golden Voyage of Sinbad", a great little flick starring Tom Baker as a villainous sorcerer. One thing about Harryhausen monsters is that most have lives outside of being killed by heroes. So do the monsters in my dungeons. Most are not just sitting around waiting for a fight. Like you and me, they get hungry or sick, worry about their love lives, and make plans for the future. This is both a good and a bad thing for the PCs.
It's bad in that I build dungeons that "make sense". That is, they're internally consistent instead of "fair". If you come across a few kobolds, that probably means there's a whole tribe of the little bastards nearby. That also means that they'll have sources for food and water, and the other things kobolds like to have to turn a ruin or cave into a home. If you meet some skeletons, that probably means there is, or was, a necromancer in the neighborhood who animated them. So I worry more about things being internally coherent than I do about them being the proper "challenge" for your level. In short, I don't play fair. Within the bounds of the rules, neither should you.
And here's where it's good for the PCs. These dungeons make it easier to find advantages. The monsters will behave in reasonable (from their point of view) ways. Kobolds can be negotiated with. Their water can be poisoned. They can be bribed, or driven off by a larger tribe of orcs. The necromancer who created the skeletons probably gave them orders. Maybe they're to guard a certain area, but not leave it in pursuit of the party. Maybe anyone who wears a certain garment or displays a certain symbol is allowed to pass unharmed. In any case, I love lateral thinking, and will usually give any creative idea the benefit of the doubt, or at least a dice roll for success.
This also means that you'll get the treasure that it makes sense for these critters to have. In most cases, that's better for you than the usual returns on the treasure type tables.
Next time, I may get back to my mapping of Pitsh, but it's more likely I'll be posting about the caloric content of a gnome-sized barrel of pickled herring. The things I do for my players...