Here's what I though what happened to Classic Woody just before "The New Woody Woodpecker Show" is aired in 1999.
It seems that both Screwball Woody and today's Woody are jealous of Classic Woody, mainly because he's sweet, caring, defensive, serious and a fatherly figure to Knothead and Splinter. Neither of them can't take it anymore so they teamed up to get rid of Classic Woody once and for all.
Their insane, crazy and twisted plan to get rid of Classic Woody is ... mummify him alive and have him locked in a sarcophagus in an abandoned Egyptian tomb in the lone desert. That's it? That's their insane, crazy and twisted plan to get rid of Classic Woody? They could've done better, but for now, let's not get too violent here, after all, it is a silly kid's cartoon.