I have a vivid fragment of memory from when I was young in the mid 80s and catching the end of a movie on tekevision my mother was watching. It was either all puppets or mixed with live actors - but the important point is that it seemed to be about a vengeful jester who was abused and then killed off the royal family in gruesome ways, taking quite some pleasure in it. I seem to recall a grotesquely fat king maybe drowning in a bathtub/being boiled alive... and at one point the jester hanging from a chandelier and giggling like a madman. Was this all a bad dream or an actual movie?

HotFrog is all I can think of as the name, but that yields zilch when googled...

I think you're looking for something associated with the short story "Hop-Frog". (There's info about its origin here:Hop-Frog - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Hop-Frog#Adaptations))
It looks as though there were a few adaptations, maybe the one you saw was the 1992 version called Fool's Fire...
Fool's Fire (TV 1992) - IMDb (http://www.imdb.com/title/tt0210047/)

*EDIT* Puppet king character picture... http://www.notcoming.com/reviews/fools-fire/