After Hercules defeats the Hydra the Muses start singing the song "Zero to Hero". About half way through this, one muse sings the line "... is he bold?" At that moment she takes a step forward, her dress flies open, and you can see that she isn't wearing any underwear.
At the beginning of the movie, when the gods make a cloud-cradle for baby Hercules, look closely at the cradle. There is a penis-shaped part of the cradle at the top of it. It grows and then flops back down.