Mistakes were made.

code/modules/mob/living/carbon/human/species_types/dullahan.dm

@@ -34,7 +34,9 @@
 	if(head)
 		if(pumpkin)//Pumpkinhead!
 			head.animal_origin = 100
-			head.custom_head = image('icons/obj/clothing/hats.dmi', "hardhat1_pumpkin_j")
+			head.icon = 'icons/obj/clothing/hats.dmi'
+			head.icon_state = "hardhat1_pumpkin_j"
+			head.custom_head = TRUE
 		head.drop_limb()
 		if(!QDELETED(head)) //drop_limb() deletes the limb if it's no drop location and dummy humans used for rendering icons are located in nullspace. Do the math.
 			head.throwforce = 25

code/modules/surgery/bodyparts/head.dm

@@ -33,7 +33,7 @@
 	var/lip_style = null
 	var/lip_color = "white"
 	//If the head is a special sprite
-	var/image/custom_head
+	var/custom_head
 
 /obj/item/bodypart/head/can_dismember(obj/item/I)
 	if(!((owner.stat == DEAD) || owner.InFullCritical()))
@@ -120,6 +120,8 @@
 	..()
 
 /obj/item/bodypart/head/update_icon_dropped()
+	if(custom_head)
+		return
 	var/list/standing = get_limb_icon(1)
 	if(!standing.len)
 		icon_state = initial(icon_state)//no overlays found, we default back to initial icon.
@@ -131,11 +133,7 @@
 
 /obj/item/bodypart/head/get_limb_icon(dropped)
 	if(custom_head)
-		if(!dropped)
-			custom_head.layer = BODYPARTS_LAYER
-		else
-			custom_head.layer = initial(custom_head.layer)
-		return list(custom_head)
+		return
 	cut_overlays()
 	. = ..()
 	if(dropped) //certain overlays only appear when the limb is being detached from its owner.