@Piisami "That's probably an issue with most truly weird beasts, they have the feel of bad guy mounts...."
They can come across as bad guy mounts. And why not? If you ask goblins and orcs, they would probably tell you dwarves ARE the bad guys, just like vice-versa. I should imagine both folk's propaganda arms work overtime telling awful stories about each other - it's true enough of humans, and if history teaches us anything, it's probably that both sides are exaggerating, but probably right: they've all got a bit of villain in them.
And, of course I'm in an odd corner of the fantasy market, but to my imagination, there always was something psychedelic and weird enough about dwarves and elves, that it seems to me that monsters from a fever dream would be right at home among them.
But, then again, it's all in the sculpting, isn't it? And it does even have to be THAT weird to evoke fantasy. Take the odd-looking creatures that accompany the Fidwog Command as an example:

Plenty weird enough for a fantasy setting, yet just this side of endearingly cute.
And, the weird beast from Bakshi's Wizards is in a similar place: weird, even a bit menacing, but kinda cute - I haven't seen the movie since the '80 or early '90s, but I seem to recall the character was a deserter from an evil wizard's cavalry:

Something similar could be said of many species of bats, whose fantasy counterparts dwarves might well share some troglodytic territory with: weird but cute, though there are also species of bat that are grotesque enough to suit any traditionally evil goblin army as well:

That's not to say we should mount dwarven cavalry on bats and leave it at that (though that is an idea), but one could do worse than conjure a sightless, ground-walking megafauna loosely inspired by the more attractive bits of bats: the fur, large ears, etc., while applying all the menace of a charging war-horse, camel, oliphaunt, or attack dog....
And, I'm excited to see in this week's newsletter that Wargames Atlantic is actually about to make just about the most perfect dwarves (and elves) for me that I could hope for, in the form of "Villagers (2): Elves and Dwarves" - which shouldn't have surprised me, as I also loved the first fantasy Villagers set:

Sure, I could nitpick on wanting even more eccentric hats and so on, but why, when the bits that are thre, are great stuff! (And maybe there's another half-frame or more to this set that hasn't been previewed yet - that would be icing on the cake!) Villagers and townsfolk, yes, but I also see town militias there, reluctant heroes, unconventional villains, eccentric NPCs of all sorts, specialists for more formal armies (scouts and rangers and the like)... and these are characters that can even be translated into a sci-fi setting readily enough, too (see Shadowrun for example, though there's also room in Death Fields for this sort of thing - see again the Einherjar faction.....)
I, for one, will be loading up on these guys. Thank you very much, Wargames Atlantic!