2 An armed knight towards them galloping fast, 3 That seemed from some feared foe to fly,
fly > flee
4 Or other grisly thing that him agast.
grisly > horrible, fearsome agast > terrified (esp. with fear of the supernatural: cognate with "ghost"; only the past participle of this verb [aghast] remains in current use)
5 Still as he fled, his eye was backward cast,
Still > Continually, ever; yet
6 As if his fear still followed him behind; 7 Als flew his steed, as he his bands had burst,
Als > Also flew > flew; fled as > [as though] bands > [bridle]
8 And with his winged heels did tread the wind, 9 As he had been a foal of Pegasus his kind.
As > [As though] Pegasus his kind > Pegasus's kind (kind = breed. Pegasus is the winged horse, said to have sprung from the blood of Medusa (see Met. 4.785-6). In later myth, he is regarded as the horse of the Muses, for it was with a stroke of his hoof that the inspiring fountain Hippocrene, on Mount Helicon, was caused to well forth. In the almost incredible fecundity of his vision, Spenser at this point is surely alive to the image of such a horse (i.e. art, poetry) serving to carry a man away from despair)