First, you must know that the lady is Blanche, the Wizard's wife, who is obviously not a gorgeous milkmaid. Next, I tell you that the Wizard can do magic, or at least a lot of it. My students have a great time formalising the situation.
Sample formalisation of peasant's beliefs:
Panel 1:
(a) can_do(wiz,magic) & desire(wiz,magic) ==> will_do(wiz,magic)
(b) wife(me,W) --> desire(me,gorgeous_milkmaid(W))
(c) wife_into_gorgeous_milkmaid --> magic
Now, there is a simplification here as (a) is actually a temporal logic
startement (hence the ==> arrow), and (c) is related to it. Moreover,
the "will_do" predicate has an interesting semantics, with a kind of
imperative connotation. But let me pass over these to get to the fun
...
Action: ask(wiz) as shown in panel 1.
Panel 2:
(d) husband(X,W) & not(abnormal(X)) --> desire(X,gorgeous_milkmaid(W))
(e) husband(wiz,blanche) & not(gorgeous_milkmaid(blanche))
Comment: (e) is an observation by the peasant, subject to another
interpretation (see below!). It is the result of an exogenous
action ("nature's event") -- the appearance of Blanche.
(f) not(abnormal(wiz))
At this point, the peasant's beliefs are inconsistent. To restore
consistency, a belief revision must occur. Here is where the fun
begins, as there are umpteen ways to do this.
Panel 3:
Some alternative results of belief revision (informal):
"Oh, oh, the wiz does not have magical powers"
"The wiz is abnormal" -- not likely, as in this case the peasant
could have stayed on and asked for the favor anyway.
"Good heavens, is this what the wiz thinks a gorgeous milkmaid looks
like? I'm off home!" (This one actually requires a re-formulation of
(e) above in an interesting way.)
And lots more!! Have fun. (Note: the belief revision theory of modal
logics is not yet a settled story, so here is your chance ... )