Ok now I know I don't recall much about this show. I was young and remember them having live action people in a castle with (I believe, cg or puppet) ghosts. One of the ghosts was an older woman who continually fell asleep. Can anyone help me? Have I gone completely mad?

Are you thinking of the muppets?

Sadly no, although I love the muppet show. I don't believe it was the muppets. It was an actual show and not a short or skit... its killing me mentally really. =)