He walks through a nightmare world, an ashen wasteland crowded with translucent shapes and slimy things, until finally he encounters two beings, the Goat and the Hyena -- not animals, exactly, nor yet men. The husks of men. They were once lovers -- they call each other "my dear" and "my love," but only in mockery, the affection they once shared bled away long ago through their service to the Lamb.
Through a combination of courage, luck, and sheer innocence, the Boy manages to slay the Lamb and release the Goat and the Hyena. Then he walks "in kind of a dream" to where the searchers from the Castle can find him.
The gay symbolism was obvious -- the Lamb and his minions who worked to pervert men and boys were nothing more than the "Swishes" of Rocky High, who could destroy you with a whispered word or a touch. But that wasn't the frightening part -- many, many stories of the Cold War Era -- such as James Purdy's Malcolm, depicted gayness as a brooding malignancy.
Mervyn Peake drew the illustrations himself. For some reason he specialized in male nudes, though I haven't seen anything indicating that he was gay.