Two years have elapsed and it is now September 1943. The airmen have escaped to England and Bertorelli and the Italian troops have withdrawn. Rene's hopes for peace and quiet are, however, dashed as Yvette announces her pregnancy. With the war now seeming to turn against Germany, Von Klinkerhoffen considers assassinating Hitler. Gruber and Von Strohm hope to sell the original painting and flee to Spain so they get Helga to steal it. To ensure her cut when the sale goes ahead she 'removes' one of the Fallen Madonna's boobies as her insurance.
Michelle wants Rene to set up a mobile radio station to broadcast propaganda, the parts of which will be dropped by plane. Unfortunately they fall down one of the chateau's chimneys. Happily a Spanish flamenco group are booked to perform there so Rene and his staff impersonate them. Gruber is aware that the real dance troupe contains a Spanish art expert to whom he is to give a photograph of the painting for copying, but he gives it to Alphonse by mistake.