Something that looks cute/pretty but also weird and grotesque is said to be "kimo kawaii" in Japanese slang. "Kimo" (from "Kimochi warui") means disgusting and "kawaii" means cute or pretty. For example, this coin bank, "Face Bank," eats coin when you put them in his mouth. It is kimo kawaii.
Sento-kun was another kimo kawaii character. People complained when Nara released him as their city mascot, and some started an "am-Sento-kun" campaign. However, we're used to him now. Actually, there's a Japanese saying that says "ones gets bored of beauty in three days and one gets used to ugly in three days." Now we have a new kimo kawaii character: Kobito Dukan (the dwarf encyclopedia). It's for kids: a little boy observes dwarves with a guidebook that his grandpa wrote. Here is trailer of the DVD.