As far as I know, there’s no film based on Kaye’s life being planned, but after seeing him in *The Inspector General * a few days ago, I rememberd how much I miss his style of comedy and I think Short would be the comedian to cast to play Danny.
I think Martin Short would be a good choice (especially since he’s got the musical chops), height notwithstanding. Kaye lived an interesting and diverse life, but his film antics are pretty insufferable in long doses (YMMV). He definitely got more mileage when I was a kid since his humor was rarely what you would call sophisticated (which I guess also applies to Short–in his movies, anyway).
I hate Martin Short, loved Danny Kaye, but when Short does an impersonation he is very clever to do it right. Not like Jim Carey for example who also loves to overact.