Deliberate mistake: Foils, rapiers and other fencing weapons did not appear before around the 16th/17th century, yet the main characters (in an approximate 8th to 10th century setting) use them extensively. I know that back in the days when the movie was made, the swashbuckling genre was quite popular, but it still is a reality error.
Deliberate mistake: When Hawkins mocks Ravenhurst by pouring himself some wine and then drinking it while fending off Ravenhurst's, Danny Kaye repeatedly uses the same fencing movements.
Answer: Fergus was indeed the unfortunate one being tortured to death, although this is off-screen; the Captain mentions it to Ravenhurst and his compatriot right after Hawkins wins the tournament. However, as far as I can remember, that he had died was mentioned in all the versions I've seen up to date. And also, Fergus did reveal the critical information which caused the arrest of Hawkins and Maid Jean, and the revelation of the child's presence in the castle.