There should be three fights in the opening, I think he's on the third, while the one you describe is the second - riposting/reflecting (it doesn't matter which order the elves are hit on the regular screen, the battles end up the same order every time)
Initial one should include - take damage → using items → blocking and counter attack.
Second one should be - riposting → attack riposted after Cartman says the guys just standing there so hit him → given bow → kill back elf w/bow → front elf switches from riposting to reflecting and is now vulnerable to physical attack or power attack.
Since the poster said he's got the bow (introduced in the fight) he's on the third fight. IIRC he's supposed to multiple hit attack the armored elf (upper character using the normal attack and the "X" button the rogue should get three hits), then when multiple hits are landed and the character is killed, he's supposed to then hit the high defensive character with his Rogue's dagger's "hard" hit (the square button on the PS3). Neither character should be in a reflecting/reposting stance IIRC.
Assuming he's done that, and its not letting him go on I'm at a loss. At a thought, I'm wondering if he used a "X" attack on the last attack of the third elf fight instead of a "square" and that's created the problem?
@Amentep - It sounds like you understand my plight correctly.
The interface is telling me the dagger can not be used against the second opponent with the 2-handed hammer in the third fight (after the initial attack where Cartman makes the "see, I told you" comment, and yet, that is the only item, weapon and attack I can choose... I'm unsure what else I could even try as it has ended in the same result replaying the whole sequence over ten times upon leaving the tent.