If you reduce Malistaire the Undying in the Graveyard to less than 1000 health in his first form (with one team I took him down to 80), he will proceed to his second form as intended. When you kill the second form, he will respawn again with 150 health (but won't restore his health to 60,000). This form has the appearance of his first form but adopts the cheats of his second.