• All, who neither dance on tight ropes nor eat peanut butter, are tall.

• Creatures with spikey hair who look silly will go swimming if they do not dance on tight-ropes.

• A kangaroo looks silly wearing sunglasses.

• A smart creature will always do what he ought to do.

• No one ought to go swimming who looks silly and eats peanut butter.

• A smart driver wears sunglasses.

• Kangaroos that have sneezing fits are avoided.

• Short creatures who go driving have sneezing fits.

• No creatures ought to dance on tight-ropes if they have sneezing fits.

• All, who do not dance on tight-ropes and who are avoided, have spikey hair.

All, who neither dance on tight ropes nor eat peanut butter, are tall.

I guess I'm just being grammatically picky.  When I read the puzzle's first given, the meaning it conveys to me is "Everyone is tall and does not dance on tight ropes or eat peanut butter." due to the punctuation.

If you still don't see it, try rephrasing it with a new subject (and conjugate accordingly), as: "Jim, who neither dances on tight ropes nor eats peanut butter, is tall."

Therefore, no short kangaroos who are smart exist (since everyone is tall.)

Yeah, yeah, I've read the comments and the solution already; I just wanted to point out how careless grammar (in this case, a single extra comma) can change the meaning of a sentence.  :-P