There are really two stories, which are highly similar but are different enough to merit their own synopses. The background on the world of Lodoss is that it is a cursed island split off from Alecrast, the main continent. Lodoss was cursed as a result of the gods' warring in early times. The last follower of the evil god Falaris left was Kardis, the goddess of destruction. She was bested by Marfa, a follower of the god Falis, whose physical body was destroyed along with Kardis.
Now, thousands of years later, people struggle in Lodoss. The kingdom of Sorcery fell a thousand years ago, and since that time the sole survivor has been jerking the strings like a puppetmaster. Karla, the Grey Witch, poured her essence into a golden circlet that allows her to take over a person's body when she is killed. In this way, she is immortal. In an effort to prevent the fate of her previous kingdom from overwhelming Lodoss, she has appointed herself keeper of the balance, so that neither the forces of light or dark can triumph.
The OAV was the first to come out. A total of thirteen episodes, it details the War of Heroes, beginning with the Marmo (badguys) invasion of Lodoss. Beld, the Emperor of Marmo, is expanding his kingdom towards the north. His forces have already spread into Kannon and Alania.
Beld's champion, Ashram the Black Knight, is commanding the Marmo forces. Along with Pirotess, the Dark Elf (she's in love with him), Ashram strives to win for the sake of his country. He is an impressive swordsman and a dangerous opponent.
Our hero, Parn, is a young man searching for an identity his father lost. Because his father Tessius was cast out of the order of Holy Knights of Valis, Parn's village views him as a menace and in disgrace like his father. However, it is revealed that Tessius was "disgraced" for breaking a treaty and saving the life of Princess Fianna, King Fahn's only child and the heir to the throne. King Fahn had to obey the treaty and give up his baby for sacrifice, but Tessius valued the Princess's life above the treaty.
Parn and his best friend Etoh, a priest of Falis, head to see King Fahn to bring news of goblin activities near their village. On the way they are joined by Ghim, a dwarf; Deedlit, a High Elf; Woodchuck, a thief; and Slayn, a sorcerer. Ghim's mission is to rescue Leylia, the daughter of Neese, a high priestess of Marfa. Leylia was taken over by Karla, and has been gone for seven years.
Parn meets his idol Kashue, the Mercenary King of Flaim. Kashue is a friend of King Fahn's and goes into battle with them. Fahn loses his challenge to Beld and is killed, but Karla, in an attempt to even things out again, strikes down Beld. Ashram takes Soul Crusher, Beld's Demon Sword, and continues the emperor's plans.
Although Ghim loses his life to free Leylia from Karla's control, the witch takes over the body of Woodchuck and continues her manipulation from there. Now the threat is from the sorcerer Wagnard, who intends to resurrect Kardis. For this he needs a High Elf and the Scepter of Domination, which Ashram takes from the dragon Shooting Star but loses in order to save Pirotess. Now in possession of the Scepter, Wagnard kidnaps Deedlit and takes her to a shrine of Falaris in Marmo.
With forces from Flaim and Valis, and the help of the mercenaries Orson and Shiris, Parn and the others head for the island of Marmo to rescue Deedlit and save all of Lodoss. In the end, Ashram and Wagnard kill each other, and Parn, with Soul Crusher and King Fahn's sword (which is the equal and opposite of Beld's) manages to rescue Deedlit.
Parn becomes a Knight of Lodoss, rather than serving only one country.
This is the TV series that came out several years after the OAV. There are so many small differences, and it's practically a whole different series. It's usually best not to compare the two. The series is 20+ episodes (plus Lodoss Island).
The series begins with the mercenaries Orson and Shiris (they play a MUCH bigger role in the series than the OAV). They've been hired to capture the sorcerer Slayn, but instead get tangled up with his assistant Cecil. Parn comes to rescue Cecil and fights Shiris, who is hot-headed and brash. When Parn has her at his mercy, Orson's strength is revealed. Orson is a berserker controlled by the spirit of anger, and part of the quest becomes the return of Orson to normal.
Parn and his companions go to Flaim to visit King Kashue, and there encounter a young boy named Spark, a future hero. Shooting Star, the red Ancient Dragon, is in possession of the Scepter of Domination, which Ashram is also headed for. However, first Ashram searches the other dragon caves, including that of Abram the Sea Dragon, who guards the Soul Crystal Ball, which has the power to bring people back from the dead.
Ashram has Shiris, Orson, Cecil, and a grass-runner (a small elf) called Maar in his power. A cut from Soul Crusher begins to bring back Orson's feelings! Searching for the Scepter, they meet at Fire Dragon Mountain.
At Fire Dragon Mountain Parn and the others do battle with Ashram's underlings while Kashue confronts Ashram in single combat. Ashram is defeated and falls head first into a pit of lava that Deedlit opened to kill Shooting Star. Outside, Orson calls on the spirit that possessed him to protect Shiris, and gives his life for her. Shiris wants him to kill her because it's her fault that he is fatally wounded, but he dies before his berserker self can. She buries him at Flame Dragon Mountain with his sword for a headstone, and goes on to live her life because that's what he would have wanted for her. Eventually, she becomes Queen of Moss.
The story jumps ten years after the defeat of Ashram. Spark is now a knight-in-training in Flaim. He is denied the right of knighthood by King Kashue, and is instead sent out after the Soul Crystal Ball, which was stolen by Dark Elves from the treasure room. Along with Spark Kashue sends the warrior Garrack and the half-elf Leaf. He is also joined by the dwarven priest of the War God Myrii, Greevus, and the woman Ryna, whose mate Randy was killed in a magic attempt to stop Spark.
The monster implanted inside Randy was countered by Little Neese, the daughter of Slayn and Leylia. Neese is a few years younger than Spark, and he dedicates himself to protecting her. She is "the Doorway," since she had the blood of Naneel, the Queen of the Dead, and her body is a vessel that Kardis can use to return to Lodoss. With the Soul Crystal Ball and the Staff of Life, Wagnard needs only Neese's body to bring back the dark goddess.
As it turns out, Ashram is not dead. He was rescued by a former lackey of Wagnard's, and is struggling to make Lodoss a place for Marmo. He still conflicts with Parn, who is Spark's idol.
Neese is finally kidnapped by Wagnard and brought to Marmo, with the assistance of Karla. The two of them set her up for the sacrifice, although Parn, Deedlit, Leylia, Slayn, and the others try to save her. When Spark is determined to sacrifice his own life to save her, Garrack takes the death blow aimed for Spark, allowing him to stop Wagnard. As it turns out, Garrack was a nobleman from Flaim whose only order was to protect Spark at all costs.
Neese's personal struggle against Naneel and Kardis is finally won because of her love for Spark. Big surprise. She accepts that Naneel is a part of her, and thus conquers the Dark Queen and the possibility of Kardis' resurrection. This means that Spark must make a choice: he can save Neese's life, or he can have Marfa be reborn in her body. It's rather unfair, since he is in love with her.
Because Marfa will bring untold happiness, he chooses to save Neese and let the world be happy by itself without interference. Ashram takes the people of Marmo onto a ship and goes off to find other lands. He definitely is a much better character in the series, because he is a great leader.