The elves:
Either actual elves or eladrin or imps. Someone took notice when this powerful wizard was starting to tip and sent minions to 'help' him along the way. Little elf type things helping him in his dark task and subtly prodding him farther along the path to insanity.
As for reindeer:
Respec some nightmares, only with cold and they look like freezing charnel reindeer. Simple. Santa might think they are normal reindeer and be unable to see them as anything else, but everyone else will see their true, horrible form.
I am actually picturing them now as Reindeer shapes made out of wicker (ya know, the kind of thing you might see on peoples yards, but lifesize) only inside the wicker is a foul pulsing icy blue malevolence. Tendrils of horrible cloying frosty air pour from the holes in the wicker. Maybe when the Reindeer are killed whatever was inside pours out and is some horrible spectral monster. Etc.