Achewood/WMG

Phillippe will win the next Great Outdoor Fight
Sure, he's a nice little otter kid; but witness how angry he gets when a loved one in threatened, even if that loved one is a couch.

Cornelius somehow knows Ray's father
Let's examine the details.

A: Cornelius is a Badass, as his victory in the Badass Games shows.
 * He's an expert cook and has extensive knowledge of pretty much everything.
 * It's hinted that he had a criminal past.
 * He could identify the most badass car in existence.
 * He could gain the respect of a wild dog.

B: Cornelius takes genuine interest in the Great Outdoor Fight. Bear in mind that this man is one of the most sophisticated characters in the comic strip. While it's possible that he would take an interest in Ray's welfare, he is just as interested in the fight as Lyle or Lie Bot.

C: Look at this. Achewood varsity. Now, odds are good that Achewood has some good athletes.

D: Also note that Cornelius is quite willing to resort to violence. And he uses a cricket bat, a weapon that is both very British and very awesome.

A man this awesome must have some relation to the Man with the Blood on his Hands. This leads to some theories:

Cornelius was to Rodney as Beef is to Ray
Not sure how likely that is, as Beef probably would have noticed this. But still, it's possible.

Note that Rodney is aware that Ray is unwilling to beat up Beef. This implies that Rodney faced this same decision; but, rather than face the Jeeps, he decided to beat down Connie.

Cornelius was the leader of the army that opposed Rodney
Less likely than the above theory. But this is WILD mass guessing, so what the heck.

Philippe is five because he is a living stuffed animal.
(Further) evidence comes from Achewood's trip to Europe; other characters appear as themselves, but Philippe is clearly a stuffed animal. This is why he is five.
 * A lot of the characters are stuffed animals.
 * That doesn't explain why TÃ©odor is seen aging and dying, though.
 * Here's a bizarre idea:

Philippe, or Teodor, is a cybernetic/genetic experiment

 * ...What?! It could happen.

It's All Just a Dream
The entire world of Achewood exists only in Chris Onstad's mind - that is, the Chris Onstad who is a character within the comic. (He made several appearances in earlier strips). It is well known that all the central characters are based on stuffed toys or pets of Onstad's and that many of Onstad's favourite things (such as cooking) are often essential to the plot. The Onstad in the comic has become addicted to Achewater, the absinthe-like drink made from the fictional Achewood of the comic's title. The entire comic is his bizarre hallucinations as he slowly drinks himself to death.

As the comic has continued, the characters have become more real, and the distinction between the underground and overground more blurred until they essentially no longer exist: the conceit that the characters live in a separate world from humans has disappeared completely from the comic. Onstad has retreated completely into his own bizarre fantasy world, with his mind possibly snapping during the incredibly bizarre, unsettling two-strip micro arc 'Ray, I'm a Prostitute' (Achewood Regulars will know what that is). The melancholic affects of Achewater account for the bittersweet undercurrent and the frequent bizarre, unsettling moments in the strip. (Four words: 'all souls did burn.')
 * "m-mom? Mommy? I...I'm in trouble...I made...a...a really bad choice..."
 * Further guessing: the different characters represent different aspects of Onstad's psyche. The three cats, Ray, Roast Beef, and Pat, are respectively Onstad's Ego, Super Ego, and Id. The changes they undergo as the comic goes on reflect his attempts to regain his sanity and cure the imbalance that forced him to turn to the opiate of Achewater in the first place.

Onstad based the design of Cartilage Head on the live-action movie Skeletor
Observe.

Philippe and Teodor were childhood friends.
radioelectric explains it in the comments here. "I have a feeling this is very bad form but I can't help posting this.
 * I'm going to quote the comment since it takes forever to find it on the page:

I was asked the other week why Phillipe is staying with Teodor, rather than with his mother. From memory I can't recall a reason ever being given. I did have a cute idea though.

As Phillipe is always five, I had this cute idea of Teodor and Phillipe meeting as children. Maybe even with Phillipe as the older, more mature friend originally. Subsequently, Teodor ages whilst Phillipe stays the same age, until eventually Teodor is of sufficient age to take Phillipe on as his ward. It's a bit like a backwards Flowers for Algernon thing."

-Jossed by the text pieces in the second collection, which detail how Phillipe came to the Onstad home - he was accidentally mailed by his mother.