Hercules and Thor continue to brawl through trains and construction sites whilst at the same time Odin decides upon a punishment for his son—at the prompting of his counsellor Seidring the Merciless, he will strip Thor of half his power in the midst of this battle of gods.
Not being able to do the deed himself, Odin endows Seidring with the power to perform the task. The sentence is carried out and Thor is nearly crushed when Hercules topples an abandoned building on him, saved only by the leverage of his hammer Mjolnir. As the battle continues Hercules senses that something is wrong with Thor and when he suddenly cannot lift a tractor, Hercules takes the opportunity to deliver a knock out blow! A crowd surrounds Hercules celebrating his victory and a Hollywood agent if makes him an offer for a movie!
Shell-shocked and defeated, Thor is mocked by the crowd. He soon realises Jane Foster witnessed what happened although she reassures him that he is the only one she loves and confesses she only wanted to make him jealous. The disgraced Thor rebuffs her, declaring he is no longer fit to wear the mantle of the Thunder God and walks off. Suddenly Jane hears the voice of Odin, revealing that Thor’s victory was stolen from him and compelling her to go to him as his penance has ended. The issue ends with Jane following the dejected Thor into the distance.
When the story picks up in issue 127 we join a disgraced and shamed Thor fleeing Jane Foster who is declaring her love for him to reassure him. Unfortunately Thor is having none of it and walks off, Jane chases but is distracted by a car accident where she uses her nurse skills to help save lives. Then Thor is gone, standing alone on a mountain top.
Meanwhile Hercules has gone to Hollywood! It turns out he will be starring in a movie about himself! Only it turns out the movie’s producer is Pluto – the Greek God of the Netherworld – and he has enlisted Hippolyta, Queen of the Amazons to aid him in his scheme to entrap Hercules into signing an unbreakable Olympian Contract. Hippolyta is still bitter because Hercules rejected her advances centuries ago.
Meanwhile back in Asgard, Odin is regretting what he has done to his son Thor. He asks Seidring the Merciless to restore Thor’s power, but Seidring has other ideas. This is because he has been corrupted by Odin’s power and instead defeats Odin and declares himself the new overlord of Asgard. Balder leads the warriors in opposition to the newly-minted tyrant.
As Thor ascends the Rainbow Bridge, he discovers Heimdall imprisoned in a force field; moving on his finds all the other mighty warriors rendered helpless by magical means. He then comes face-to-face with Seidring, who tries to enlist Thor onto his side. Thor refuses. In response Seidring unleashes the fury of the Odin Power and Thor evades crashing planetoids only to be trapped in a bubble of liquefied wolfs bane. Seidring then plans to send Thor into Limbo but Thor seizes the grip of the Odinsword, threatening to destroy the universe unless the evil one surrenders. Seidring gives up and restores the Odin Power to its rightful owner. Odin then declares his exhausted son the noblest Asgardian of all.
As Issue 128 opens Thor is still recovering from his battle with Seidring the Merciless leaving Odin to clean up the remainder of his mess. Odin proceeds to the Judgment Seat and has the traitor Seidring brought before him; as punishment for attempting to usurp the throne of Asgard, Seidring is given a kingdom to rule—that of the bestial Rock Trolls.
Meanwhile back in Hollywood, Hercules has arrived and is given the V.I.P. treatment, including meeting his attractive co-star who will be playing the Amazon Queen (Hippolyta in disguise), but is attacked by a giant monster. Film producer Pluto explains the giant monster was as a mechanical film prop for an impromptu screen test. Pluto then escorts Hercules to a banquet in his honour.
Back in Asgard, Thor is hunting with Balder on the Sea of Marmora. After an incident with a beast fish he realises he still needs to recover more if he is ever to defeat Hercules.
Back at the banquet, Pluto offers Hercules a contract to sign but Hercules scoffs at the idea that he must rule the Netherworld but Pluto quickly explains that it refers only to the plot of the film. Hercules signs—and Pluto has his victory. He reveals himself as the actual Greek Ruler of the Netherworld and the actress as the genuine Hippolyta, Queen of the Amazons, Hercules has just agreed to replace Pluto in his realm for eternity, and the floor open to reveal a spiral staircase heading down to the pits. Hercules refuses to go and the villain sets a pair of Titan warriors on him resulting in a big brawl.
In Asgard, Thor has finally recovered back to full strength and asks his father for the opportunity to return to Earth to redeem himself in battle against Hercules. Odin grants permission with a blessing. Thor heads directly to Hollywood where he finds Hercules in the midst of battle with demons of the Netherworld. Enraged at the sight of such an unequal fight, Thor joins in on Hercules side and together they vanquish their foes. Pluto, watching from the sidelines, departs for Olympus to ask Zeus to enforce the contract. As the two heroes survey the aftermath of the battle, Thor learns that Hercules has foolishly signed an Olympian Contract and decides to postpone their own duel as Hercules has a more terrible fate awaiting him!