Topped off by his OWA form being a rather anemic-looking dragon with his own head on it, and his "You Are Doomed" speech being interruped by more chicken clucking. This troper lost the final battle the first time around simply due to laughing too hard to play or even pause.
NONE SHALL DEFEAT THE MIGHTY ZAROK!! Awwwk-bokbokbokbokb—A-HEM...so prepare to die.
The cutscene after escaping Peregrine's Castle. Dan's scream is priceless.
Zarok's book includes powerful magical tomes, how to look good in your 400s, and card tricks!
Also, Zarok's reaction after Dan manages to defeat his champion: "...Bugger."
Lots of stuff said by the characters in the Hall Of Heroes too.
Woden The Mighty: Fortesque, you jawless arrow-magnet! What are you doing back here?!
The Dragon's pre-fight Boss Banter, where he threatens to burn the flesh from your bones...only to realize that Dan's already a skeleton. Then he threatens to pluck out both his eyes...only to realize he's only got one. Finally, he just settles on saying he's going to beat the crap out of him.