Cursed Scarab item card

By Dal64, in Runebound

Last night playing runebound island of dread my buddy and I encountered the following situation.

I had the cursed scarab item card which states that when you make an unsuccessful attack take +1 damage on top of any damage the enemy inflicts. When this happens give the enemy 2 damage.

I made it to the boss man assif shib sa. If I kill him I win. I had 2 hearts on me with a max life of 7. Assif had 6 hearts on him out of max 8. I made an unsuccessful attack so assif did 4 damage plus the 1 from the cursed scarab for a total of 5 bringing me to my max life of 7 and knocking me out. But, when this happens I also inflicted 2 damage on him killing him. The cursed scarab is not an activation card it's a permanent card so I imagine this 2 damage happens automatically.

We pictured assif knocking me out but the cursed scarab activated killing him. I in turn woke up in a town somewhere on an island regaled as a hero for ridding the lands of this threat. Are we correct in assuming the way this card works? Is there something in the rules we are missing about card timing? Cheers.

From the FAQ: Knockouts

Q: If an attacker and a defender are both knocked out at the same time (such as through the use of an Item that does damage to both), who wins?
A: The defender wins the battle. (The monster, if you are fighting a Challenge.)

Per the FAQ, your character lost that challenge, so you wake up in the closest town, and the bad guy remains a threat.

The FAQ can be found here: http://www.fantasyflightgames.com/ffg_content/Runebound/RuneboundFAQ2_2.pdf

Edited by Michael Scorefan
Per the FAQ, your character lost that challenge, so you wake up in the closest town, and the bad guy remains a threat.

Considering the question and subsequent answer, I find your avatar oddly apropos. =)