In the episode where Rocky (the fish) goes to the cookie factory with the kids; at one moment when Rocky is looking at all the different kinds of cookies, you can see a hand under Rocky which is controlling his movements.
Slip-up, sure, but one of the funny things about TV Funhouse is that they don't try very hard to conceal the puppeteers. During the caroling segment of the Christmas Show, you see more puppeteers than puppets.