The episode: "The Great Fusilli" is the last episode of season 1 of courage the cowardly dog, and it ends with a scene where Courage is basically controlling the dead bodies of Muriel and Eustace as puppets in attempt to keep his life with them going. The more you think of the on the subject, the more psychological it becomes. This sense impose that after season 1, all episodes of the series are nothing but thoughts that Courage is having in his head it implies that Muriel and Eustace truly have died and that Courage has gone insane and made himself believe they're still alive and is trying to make us believe as well.