Never seen a movie with so much foreshadowing - so basically everything you see in the first half is either reversed or repeated in the second!
When Gulliver is promoted to the General of the army after defeating the Blefuscian Armada, Former General Edward (Chris O'Dowd) skulks off to the enemy with plans from Gulliver's salvaged booty - a page on how to "Build your own robot".
Edward returns to Lilliput to challenge Gulliver to a duel - inside a 6ft tall robot. He gives Gulliver a giant wedgie as he tries to run away, and shows Gulliver's true colors. Gulliver is banished to the 'island they don't talk about', tied to a huge raft, while the Blefuscians take control of Lilliput and the King and Queen are locked in the dungeon.
Meanwhile, Darcy has had to take the writing assignment - and is caught up in the same storm and shipwrecked on the island of Lilliput. She is captured by General Edward. Horatio escapes to find Gulliver.
Gulliver awakes on the 'island they don't talk about' - to find himself outside a giant house. He is snatched up by a little girl, and forced to accept a new life as a doll inside a giant doll's house.
That night Horatio finds Gulliver and encourages his friend to break free. Using the parachute from the dead pilot, they jump from the house and float away back to Lilliput.
Gulliver finds Darcy chained up in the dungeons. He comes clean about his background - and his feelings for Darcy. Full of courage now, he breaks everyone free -- and goes to challenge General Edward in a winner-takes-all rematch.
Edward, in the giant robot, is ready - with a new secret weapon -- electricity! (They didn't seem to have electricity until Gulliver came along) Gulliver is losing badly. Horatio bravely grabs a horse, breaks his way into the robot, and turns off the power to the secret weapon.
It's a fairer fight. Gulliver beats the robot on the head a few times, and then gives him a robot wedgie, sending him back to sleep mode.
The Lilliput King and Blefuscian Leader square up to fight again ... so Gulliver asks -- "War - what is it good for?!". They join in with his song, and everyone is at peace again. General Edward captures the Princess, but she beats him off.
Back in New York, Gulliver is now a travel writer, enjoying more time with Darcy, with published articles about his travels framed on the wall.
Dan, from the mail room, enters the office with a new mail room attendant, and is firmly put in his place. As it ends, we see glimpses of Gulliver's articles, against the original Jonathan Swift novel content.