Two thoughts...
1 Uncle Deadly could've cameoed as himself, a fully animated version of the adult phantomly dragon, as a thirdsometimes substitute uncle for whenever Uncles Statler and Waldorf couldn't make it to babysit the babies.
2 Uncle Dedly could've been brought in in baby form, probably named Baby Deadly or slightly older as Toddler Deadly, comparable to Toddler Janice.
If it were Baby Deadly, they could still get away with making him a spooky baby dragon, sort of guided by the baby form of the Cryptkeeper in the episode Lower Birth.
If it were Toddler Deadly, he could have some signs of his phantomly form present within his physique.
Another thing... He could also have Yorick as a toy skull that comes alive in the imagination segments, much like how Camilla was a stuffed chicken.