The headword (evidently quoted from somewhere) and the gloss are genitive singulars. Hesychius (iota1119) and Herodian both have an entry *)ifi/alos o( *)efia/lths, a fact which in itself would suggest that Iphialos is an alternative name for the mythological giant Ephialtes. If, however, Adler was right to print the present gloss in lower case, the gloss will be the genitive of the noun e)fia/lths (e)pi/alos and e)pia/lths are Aeolic forms: Alcman 129), nightmare; and the headword could be another dialectal variant.
See also epsilon 2221, epsilon 3909.