Shield Bashing is a new form of blocking in combat, that is introduced in The Baconing. Hold to block and a circle will appear around deathspank. Wait for the circle to get small and release . You can also hold the until the shield expires and a shield bash is automatically triggered. If done correctly all surrounding enemies should fly away from you giving you time to breathe. If you are running in a direction it will only be distributed to that direction. If you are standing still it will bash a complete circle around you. Note, also that this is bash 1000 enemies not 1000 times. To see your progress go to leaderboards, select "the Bashing Best" and filter it to "My Score."
If you don't plan to use this skill often during normal play, find some chickens and back them into a corner to repeadetly bash them. It should only take a few minutes to knock out all 1000 right away.