Whenever I do any world-building, my halflings end up looking more like traditional hobbits, even if their backstory changes significantly.
Further, I am in the process of writing up a new 4E race. Sadly, I'm not at home at the present, so I don't have all the details in front of me, but I'll share what I can from memory.
Drudgethralls are a race, created not by the gods, but by wizards. Previously human wizards (or at least apprentice wizards) themselves, drudgethralls represent failed wizards, given new shape for those failure or some crime.
Drudgethralls are often used as minions/slaves by their wizardly masters.
They have severely hunched backs, making them appear quite a lot shorter than they once stood. They have twisted, clubbed right feet.
Ability Scores: +2 INT, +2 CON
Size: Medium
Speed: 4 Squares
Vision: Normal
Languages: Common, one other
Skill Bonuses: +2 Arcana, +2 Stealth
Muleback: Identical to the muleback harness either in AV or a Dragon magazine, allows them to carry a heavier weight than their strength woudl imply.
Alchemical Training: Gain the Alchemy feat from AV.
"Not the Master!": an encounter power very similar to the paladin level 2 power daily power "Martyr's Blessing", but works against ranged or melee attacks, allows the drudgethrall to slide the adjacent ally one square and to take its place.
Obviously it needs some work, but there's a short, ugly race for you.
Chad