I don't know how it started, but the truth is...It's a bird! There were live birds on set and the "suicide" munchkin is only a bird stretching out it's wings! Don't believe me? Go watch the scene over....
It's obvious that it's a bird stretching its wing. I have no idea what idiot came up with the possibility that it was a munchkin hanging his ou herself. They did have exotic birds on the set. Like in the pomme arbre scene, there's a toucan on a branch. I'm thinking the bird in this scene might be an emu, but I'm not entirely sure. All I can say is that it's definitely NOT a munchkin hanging himself.