Lizardmen burst from their ambush positions to attack the party from all sides!
Stern and Garamon take the brunt of the impact. Garmon takes three hits to his body; while axe and mace blows, crococile jaws, and tail lashes rain down upon Stern but nothing can pierce him!
Thanis staggers under three blows from every direction, any of which could have dropped a normal man. Witherun likewise takes two heavy hits from their privative weapons, and Wraislin is turned about by two glancing blows.
By what small fortune the gods allow them, Goldwen and Flin are somehow spared in the tumult, while Tass dodges and tumbles between his allies to stay out of harm's way.
Given distance is 10yd (1" or effectively base contact on the wargames board) the lizardmen use their surprise segment for melee attacks.
The ref considers dicing to determine how many can immediately attack but, acknowledging that if the shoe were on the other foot all the players would be allowed to attack, decides all the lizardmen should attack too. It's a perfect ambush.
Lizardmen are normal types, so this will be resolved as normal (as opposed to fantastic) combat. I.e., all attacks will be THAC2 17 and deal 1-6 hp damage.
The ref dices to determine who is attacked: 1=Garamon, 2=Stern, 3=Thanis, 4=Witherun, 5=Wraislin, 6=Goldwen, 7=Flin, 8=Tass. 9d8=1,2,3,8,5,2,1,3,2. So it's: Garamon x2, Stern x3, Thanis x2, Wraislin x1, Tass x1.
However, technically Tass also surprised the Lizardmen, so this effectively cancels their surprise against him alone. So the ref re-allocates the attack on Tass to: 1d8=4, so Witherun.
Lizardmen have 2 HD and an implicit Fighting Capability (FC) of 2 men, so two normal attacks each. That's a total of 18 normal (THAC2 17) attacks; all at +2 due to surprise:
vs Garamon (AC 4): 4d20=5, 15, 14, 17,
vs Stren (AC 3): 6d20=9, 6, 2, 13, 13, 9,
vs Thanis (AC 7): 4d20=10, 9, 12, 16,
vs Wraislin (AC 9): 2d20=13, 10,
vs Witherun (AC 6): 2d20=12, 16.
Garamon 3 hits; 3d6=3,3,1 = 7 hp. 16-7=9 hp remaining.
Stern no hits!
Thanis 3 hits; 3d6=3,5,6 = 14 hp. 15-14=2 hp remaining.
Wraislin 2 hits; 2d6=2,3 = 5 hp. 8-5=3 hp remaining.
Witherun 2 hits; 2d6=5,5 = 10 hp. 16-10=6 hp remaining.
OD&D has a rule that anyone surprised might drop whatever they are holding. DD lessens it to anyone hit by surprise might drop whatever they are holding. This is primarily about the risk of dropping torches and lanterns underground, and the lights going out. I'm ruling it's less relevant to heroic-tier players fighting in daylight and going to ignore it in this instance.
Combat will continue immediately into the 1st melee round.
The lizardmen will be the attackers, and will automatically have the first blow (effectively: they will have the initiative). This is why 1" encounter distance is so deadly: they effectively get the first two blows.
Goldwen, Flin, and Tass are not explicitly engaged, and therefore have a choice of maneuvering. Everyone else is already meleed and so will be attacked again in the coming 1st round.
the Elf Medium (MV 12", AC 9, HD 1, hp 1/1, AL N) great cloak, lantern
; spells: color spray; scrolls: sleep, sleep, charm person
Hirelings: Georges; torch