There is no way I can see where a live action recast would be anything but a massive disappointment, but a Muppet version might work. All Muppets from the different versions of their tv shows and movies, and any from Sesame Street, are eligible.
Sweetums as “Fezzik”, anyone? 
Gonzo as Prince Humperdinck since he was always chasing Miss Piggy(Princess Buttercup).
Bunsen Honeydew and Beaker(in drag) as Miracle Max and “wife”.
Never, ever, a redo live action.
But I immediately starting chuckling picturing a Muppet version. I now want one.
Guess what the rats play?
I’m pretty sure this has been discussed before, but before I look at anything others have said…
Kermit and Miss Piggy are the obvious choices for Westley and Buttercup. But I also kind of want to use Kermit and Robin for the Peter Falk and Fred Savage roles.
Pepe the Prawn could be Vizzini.
Dr. Bunsen Honeydew and Beaker as Miracle Max and his wife.
Statler and Waldorf filling in for the old lady in the dream who shouts “Boo!”
Now, some links to suggestions that have been made before:
OMG. Carol Kane isn’t a Muppet? At a loss now which Muppet to cast. 
Cookie Monster as Fezzik, just for one gag:
The poisoned wine is replaced with poisoned cookies, but Fezzik keeps eating them while Vizzini is trying to explain the situation.
Rouses
Ha! No. Miss Piggy is Prince Humperdinck. Kermit is Princess Buttercup. Scooter is Westley/DPR. Gonzo is Inigo Montoya, Fozzie is Fezzik, and Rainn Wilson is Vizzini (because it’s not like we’re going to kill off a muppet, duh).
All roles played by Beaker.
Also important because we know that all Muppet adaptations need at least one human actor.
If only Carol Kane had a fuller part…
That is rather sexist! I think she is just fine the way she is, body-wise.
Totally fine in every way.
Loved her as Ghost of XMAS Present.
Here ya go
I keep hearing Kermit hollering, “Inconceivable,” then dropping over dead.
I get what you’re going for — but Vizzini ratcheting up the enthusiasm as he keeps explaining why it wouldn’t make sense to choose Option A and then drawing it out as he discusses Option B, and then doing a hacky What In The World Can That Be before chuckling at what he’ll tell you in a minute before referencing a punchline about warfare before laughing about what he’s been leading up to before pausing mid-laugh as something catches up to him?
That’s, like, the whole point of Fozzie.
Huh, I’d have chosen Sam the Eagle as either Rugen or Humperdink. Or maybe Humperdink’s door guard?