Artificial intelligence is reshaping creative domains, yet its co-creative processes, especially in group settings with novice users, remain under explored. To bridge this gap, we conducted a case study in a college-level course where nine undergraduate students were tasked with creating three original music tracks using AI tools over 10 weeks. The study spanned the entire creative journey from ideation to releasing these songs on Spotify. Participants leveraged AI for music and lyric production, cover art, and distribution. Our findings highlight how AI transforms creative workflows: accelerating ideation but compressing the traditional preparation stage, and requiring novices to navigate a challenging idea selection and validation phase. We also identified a new "collaging and refinement" stage, where participants creatively combined diverse AI-generated outputs into cohesive works. Furthermore, AI influenced group social dynamics and role division among human creators. Based on these insights, we propose the Human-AI Co-Creation Stage Model and the Human-AI Agency Model, offering new perspectives on collaborative co-creation with AI.