My personal headcannon is this:
The war happens, the hero and his allies manage to repel Cthulhu and his forces, but not without some great costs, all the races are extremely weakened and 2 new threats are luming over the horizon, the Corruption and the Crimson. In desperation, a plan is formed, to seal the spirits of darkness within the hero, to buy time for the civilizations to recover.
During the sealing ritual, another measure was taken, a connection with the hero's soul amd the hallow would created, so that evil spirits wouldn't overwhelm him. But something went wrong, instead of just stabilizing him, the spirits of light started trying to destroy the hero body and soul, while the spirits of night tried heal him, not wanting to be destroyed alongside their new vessel. This stuggle within the hero twisted him, destroying his mind and turned him into an abomination.
Using the remaining powers of light, they banished the monster to a place it would never escape, the Underworld. But instead of becoming it's prisoner, the abomination became the underworld's warden, devouring anything that stood in it's path.
And this unholy connection with both the darkness and light still lingers within the hero's descendants, the Guide being the one that we meet.