Ok, last one for awhile. My sister and I began piecing this one together, so I would think that it had to be old. Once again, it is fragmentary, and alot may be remembered wrong.
It was an "on the wall" skit, where Kermit was trying to demonstrate something. Herbert used to do this too, making Grover run way into the background to retrieve colored blocks until he fell over from exhaustion.
Kermit was explaining the concept of "in", and had a Grover-looking monster (my sister insists in wasn't the traditional Grover, and that was scary enough) helping, along with an enormous pink box. They had to pan out to get it all in the screenshot.
Kermit wanted the Grover monster to get "in" the box, but he would instead get under it, next to it, on it....etc. Kermit gets frustrated.
Finally, the scary part is that an ENORMOUS monster comes out of the top! It was green and unlike any other muppet, (It looked a little like a yak) and I think Kermit faints or runs away.
Grover seems unaffected and greets the monster by name, something like, "Hi, Bill"
We knew that big box was bad news from the get-go.
Again, this could all be remembered wrong.
***And here's one that may have been the Electric Company, but I'll toss it up, hoping someone remembers. It was an animated short with 2 caterpillars. The voice and eyes were horrible. The one caterpillar kept harrassing the other saying something like, "You don't get it, caterpillar!! You JIVE, GREEEEEEEN caterpillar!! Caterpillars never, never NEVER never.....wear brown boots!"
I had nightmares of that awful little bug too.