The Adventures of Elmo in Grouchland (1999)

The Good, The Bad and The Stinky.

Elmo loves his fuzzy, well-worn blue blanket more than anything in the whole world. However, when Elmo's blanket gets sucked through a colorful, swirling tunnel into Grouchland, the yuckiest place on earth, Elmo goes on an adventure to Grouchland to retrieve his prized possession.