I encountered this and the game tells me to go to the Dark Swamp, but instead of a battle initiating, I see an normal lizard, then my character gets pinned by numerous lizards and then says he's going to be serving their leader. I really don't want to make a new save since I've already finished the Underground Castle Dungeon and I really do not want to go through that again.
I think if may have to replay this Scene yb myself to get any idea what causing this.
By any Chance:
a) Do you play on PC? If not, it may be a bug
b) What is your Corruption Level? Some Encounters play out diffently if your corruption is high enough.
c) Do you wear Murphy's Hand?
d) Is there any message that you failed a stats check of something?