So Herc and Thor duke it out, in the end Herc surrenders (but gives a big speech about how now everyone will know that Thor is inferior to Hercules, which Thor has to let pass, since they're posing as each other).
Then, Malekith, the mastermind behind this whole scheme, reveals himself: only Herc and Thor combined have the strength to stop him, but now, having beaten themselves silly in their fight, they will now be too weak to save themselves from the fearsome Grendell, the most powerful Dark Elf who ever lived! Things are looking dire for our heroes!
Just to be clear, Malekith just showed up on the previous page; that's the whole resolution. Not so clever as he thought, it seems.
"...tell me of this elven tickler?"
Thor says maybe when he's older ("What? I'm tens of thousands of years old already!").
So the moral of the story: being good in the sack compensates for many other flaws.