you could also cheat a bit and combine effects that DBC does well...
1 - in code, gradually reduce the Y scale
while increasing the X/Z scale
2 - while doing the above, fuzz things up a bit...
A) In code, make a few 3D plains (3-4) and texture them
with a white smoky kind of texture
b) Place these plains facing the camera at dif ranges
but inside the snowman
c) scroll the textures at different speeds
d) ghost the plains and set transparentcy
This would make a sorta steam effect and hide alot of detail
on the snowman thus hiding the crappy rescaling when the snowman is too short. Its just an idea and will need some tinkering to get right.