Played this scenario with a group today and got into a debate on whether or not you needed the mirror to attack Medusa. I know that the killing blow had to be made by someone with the mirror though.
Page 5 of the rule book incidentally describes what "cannot die" implies, albeit in the context of Explorers before the haunt starts. It's worded in a way that implies a definition of the term, however.
Before the haunt starts, no one can die - that is, no trait can go below its lowest number in the line (it stays at the lowest number instead).
The Secrets of Survival book indicates the following special rule for the survivors:
Medusa can be killed only by an explorer who deals enough physical damage to kill the traitor while possessing an Image in the Mirror card.
While the game does not explain what "cannot die" means in the context of the traitor, it is reasonable to expect that they follow the same rules as the Explorers do pre-haunt. When you inflict physical damage to Medusa, if you do not have an Image in the Mirror card, Medusa does not reduce her stats to the Skull if the damage otherwise would.