You don't need the physical dps to kill both knights before the first dread spawns, the big issue it sounds like you are having is your AoEs. Make sure the BLM have their AoE rotations down, they don't need to particularly be focus firing the rooks during the phase when they are up, and keeping up the AoE damage is pretty important to get the bugs as low as possible. Even if all the bugs aren't dead don't sweat it, and just keep trying to get them down. Another big problem might be AoE damage that is being taken when the knights spawn during the 5th phase so make sure your black mages and white mages move out of AoE range.