Ha! Wow - that is an awesome battle and the first time I have heard of such a grand finale! You should post that on our facebook page!
When there is a timing issue, the player with initiative decides. However, that rule was put in place for resolving anomalies, where it is necessary to resolve one effect before another, otherwise a weird iteration occurs.
I have to agree with LumberjackJim - this feels like a draw. Perhaps we should create a FAQ - if both Mages would normally die in the same Phase (a game phase like Upkeep, or an Action Phase), then the game is considered a draw. Please let me know your thoughts on that.