This is likely Simon Green's Blue Moon Rising.
The Wikipedia summary:
Rupert's quest is to slay a dragon, proving his worth to the kingdom; however Rupert knows he has been sent to die. He stubbornly refuses to run away and proceeds with the undertaking. Rupert seeks out the notorious Night Witch who, upon finding out he is the grandson of her long dead lover provides him with a map to find a dragon. To get to his destination Rupert must pass through the Darkwood, an area in the forest where no light ever penetrates, where nothing lives except demons. Passing through the endless night Rupert is attacked by countless demons which appear to be hunting in packs though demons have never hunted in packs before.
After reaching the other side of the Darkwood Rupert discovers a dragon in a cave at the top of a mountain and upon challenging him is surprised to find that not only does the dragon not have any interest in killing him, it collects butterflies. Also in the cave is Princess Julia, a seventh daughter from the Hillsdown province who was sent to the dragon as a sacrifice but which the dragon does "not have the heart" to kill.
Upon their return, Rupert is sent to find the High Warlock. At some point, the Warlock takes a potion that turns him into his younger self.
Rupert's brother is different from Rupert's impression of him. He is not exactly an ally, but does end up fighting the demon antagonists with Julia, each using one of three very powerful swords they recover.
I found the beginning to be very comedic with Rupert constantly complaining about how the minstrels lie about quests and glory. The rest is...dark comedy at best.
