The origin of the wood needs to be examined. In a short, the mysterious nature can be hinted at, in a longer piece, more exposure helps build the tension. The obviously would be to see the tree being felled, with something odd about the part of the forest that it is in.
It seems like what would make sense would be to show the wood being carved, and something being subtly wrong with it. A shimmer to the raw wood, as if it had been varnished perhaps. Or the wood soaking up liquid in a way that wood would not. Perhaps the smile that is carved into the dummy, is different between the time it is carved and the time it is painted. Not significantly, just a subtle change in the cast of the features. Both of those create technical issues. In a short, it may not be worth doing.
The first blood that it soaks up, I’d originally stated should come from a murder, without going into much detail. In reality, that leaps ahead, and perhaps sets the stakes too high. In a slower piece, it would make sense for the dummy to soak up the sweat from the operator, and perhaps he’d feel a reaction from it. Perhaps a mild toxin from the worms. He’d become a little cruder and a little more offensive, as the intoxication seeped into his system. He said the wrong things to the wrong person, or the wrong person’s wife. I think for the sake of creating the right conflict, he’s working at a club one night, and insults the club owner’s girlfriend. So the bouncers bring him around for a private performance. Depending on the level of escalation, the club owner could have the goons break his fingers, then insist that he keep on performing. Or perhaps they just stomp on his hand, breaking the skin, but not the bones. Depends on the level of sadism that feels right.
Either way, his blood, feeds the dummy, and he starts to hear it talking to him more. We see his act change, a moment out of time, where the dummy tells cruel and vicious jokes, while the audience is frozen. Then it snaps back to the act, and the next joke is ribald, but not so dark.
A possible twist, the dummy decides to seduce the club owner’s girlfriend. Either the one previously insulted, or her replacement, depending on how the insults went and how we want time to flow in the story. There are a few ways that could play out, but the logical bit is when the club owner sends one of his goons to deal with the performer, and at that point, things go a bit dark. The bouncer distracted by the dummy, has his throat slit by the performer. Perhaps at this point, he is in the box, or perhaps on the girlfriend’s arm.
We see the dummy soaking in the blood, and the blood flowing into it, without staining it.
This likely leads to a series of deaths, including the club owner, the friendly barman, the other goon, and someone sympathetic. Probably at some point, we see the former girlfriend of the club owner, or at least her arm, shrunken from being exposed to the dummy.
After that, we have the one show were the worms finally have had enough time to mature, where they numb the performer’s arm, eating their way into his flesh. Afterwards, his face takes on the same expression as the dummy, with the worms wriggling under the skin to make it clear that they’re the one in charge. The dummy’s voice is coming out of his mouth now.
He takes a trip out to the forest, and we see the same landmarks from the original harvesting, and he either harvests some wood or plants some seeds. Roll Credits.
Post credit scene, we see wood being carved once more.