Since the game uses fairytale elements (each world is in a storybook), maybe the villain could be an evil queen sorceress. It's the archetypal fairytale villain, but it might be a bit too similar to Grunty.
Banjo-Kazooie was originally going to have a pirate villain (Captain Blackeye) until he was replaced for a giant and then Grunty. Maybe a pirate or giant could work.
Maybe an evil bear and bird, but that might be taken the wrong way instead of a light-hearted joke.
My original thought for the villain was a Mingy Jongo-type guy that is mysterious until the very end where he reveals himself. It'd make for a cool twist and will refer back to the project's early days on Twitter.