Yeah, you really need to use a different texture for the body. You just stuck a skelly head and hat onto the villager and hung him into the sky. If you were going for a hung villager that'd be fine, but this is not supposed to look like a villager! I suggest wrapping some undead clothing textures to his clothes. If you don't want to do that, at least wrap a bandit texture to his clothes, that will be fairly easy.
Also, this could easily be done in world editor using a resized support column and a floating unit of any type with it's head faced downwards and stopped animation. Or it could be done using various posts, as your model uses a post. (post as in woodpost)
I give this a 2/5. If you swap some textures to make it look DIFFERENT than any in-game doodads, or move some vertices around, then it will suddenly be useful.