Watch a short video walkthrough of this stage.
As you enter the room you'll see the Golden Axe drop, and then Dark Guld appears. This is it, the final battle! If you have some magic left charge it up and use its most powerful form against him.
The Golden Axe gives Dark Guld a lot of range. His swings start high so you can't really use jump attacks on him. As with other bosses, keep away from lining up with him horizontally so you can close in. When you start hitting him with combos you should end with a throw towards the center of the screen, and then immediately get back to work hitting him. If you throw him to an edge of the screen you won't be able to attack him so easily. When he gets up he will attempt an initial swing, and if you time it right you can hit him just before his swing is able to hurt you.
If you get too far away from him he'll start charging a magic attack. One of his magic attacks is to summon White Skeletons by throwing the glowing spheres of magic energy that are created when he charges a spell. He can only throw one sphere at a time, but there can be up to three Skeletons on the screen. You can interrupt his attack by hitting him as he draws back to throw the sphere. He also has the ability to use your own magic against you! The magic attack will always be the highest-level magic of the one or two characters that are playing, but unlike that character's real magic it only does four damage. Unlike the Skeleton spell this one can't be interrupted.
Once you deal 64 points of damage to him, Dark Guld dies and the world is saved. You'll then be presented with the Scoring screen to see how well you did.