While at Milton Abbas yesterday, I bought a small booklet on the Chalk Figures of Wessex. I must admit that I was seduced into buying it by the writer having the same
theory as myself, namely that the 'Frying pan' (a roughly rectangular earthwork encloure) just above the giant is named for Bealzebub's frying pan in mumming plays.
You can see the Trendle aka the Frying Pan clearly in this photo. (Trendle is an old word that means 'ring') and the hill is called Trendle Hill.

However, the writer also mentioned something else about the giant that I hadn't previously come across. Namely that he might have been carved by the
Dorset Clubmen. Who?, I hear you ask.
They were a third force in the English Civil War, almost totally forgotten now. They were bands of farmers who came together to try and stop both Royalist and Parliamentarian forces looting their way through the county. There were a couple of thousand of them, mostly armed with clubs and pitchforks, and they were known to have mustered at Badbury Rings (a very impressive Dorset hill fort) before the battle of Hambledon Hill, but they left very little historical record.
The Trendle is not an impressive hill fort. It was probably an old village enclosure or army encampment - I can't find enough information to gain a good idea. Can't even tell how high the earthworks are. However, it does seem at least possible that the Clubmen might have gathered at the Trendle on some occasion.
I can just imagine a group of Clubmen waiting to be called to a fight (this is how the Fovant badges that I mentioned recently came to be carved) and also wanting to make a clear statement that they were willing to defend their land against all comers. What better symbol for them to carve into the chalk than the god Hercules with his club? What better way to say "Fuck, Cromwell and the King" than to carve that giant erect phallus?
It also helps explain why no one remembers who carved the giant (in spite of him being carefully maintained...). The Clubmen were defeated by Cromwell. I can just imagine villagers saying to the writer of the 1751 guide: "Who carved it? No idea. Been here hundreds of years. Why, they do say it be a image of the old abbot of the monastery who annoyed the villagers. Then again, stories do tell of a giant who fell asleep and was killed by villagers on that very spot. Or it might be the old god Helis (note similarity of name to Hercules - try saying 'Hercules' with a Dorset accent and you're not far off...), but definitely nothing to do with my great grandfather back in 1644."
In fact, it was probably 'forgotten' almost as soon as it was made (probably a very bad idea to be remembered as having fought against both sides in the Civil War) - except by those who cleaned it regularly. If a chalk carving isn't scoured at least every 7 years, it will vanish totally. Many chalk carvings have vanished because they weren't maintained. There were clearly people who wanted that giant to remain - it meant something to them.