He did, too, but wanted to move on to other projects, too.  Henson had a dream to tell a full-blown story entirely with puppet characters.  His first attempt was The Dark Crystal.  Critics have since classified this as a "flawed masterpiece."  I will begrudgingly agree.  I don't agree that a human character was needed, as some have grumbled.  If I have any gripes about the puppet characters, it's that the hero characters - Gelfings Jen and Kira - could have used more facial articulation.  Even in those years we know Henson, et al, could pull this off.  Just look at the Skeksis or even Aughra the Seer.

Okay, the story so far... A thousand years before, the Great Crystal was split, shattering the lands and becoming the Dark Crystal.  The ruling creatures of the world were split into two species:  the Mystics and the Skeksis.  Good and evil.  Naturally the Skeksis are the most interesting characters.  I read somewhere that they were intended to represent the seven deadly sins, except that more than seven Skeksis were represented.  Maybe some of the sins were doubled?

The head Mystic tells his student, last known surviving Gelfling Jen, that he has a destiny to heal the Dark Crystal.  In true mystical fashion, his instructions are a little vague.  The head Mystic dies at the same time as his Skeksis counterpart, the Emperor, kicks the can.  The Mystic fades away Jedi style while the Emperor crumbles away into dust.  The Skeksis then squabble amongst themselves, until their General wins a challenge against the Chamberlain.  The Chamberlain is stripped of rank and clothing and tossed out.

Jen stumbles upon Aughra's mountain cave home.  She's the last known owner of the Crystal's missing shard.  Jem uses music to find it just as the nasty, crablike Garthim bust in and wreck the place.  And about those Garthim:  they scared the shit out of me when I first saw this.  Seriously.  Bad dreams about crab monsters and everything.  This was not a sequel to The Muppet Movie.

See, the Skeksis know something's up, and they want to safeguard their future.  Keep the Crystal broken until the three suns converge, and they stay in power.  That's why they'd killed all of the Gelflings.  Okay, except Jen.  Oh, and Kira.

Jen meets Kira after falling into a swamp and being yelped at by Fizzgig, a furry orange thing that's all mouth (also Kira's pet).  She's been raised by the Podlings, aka little bug-eyed, round-headed dudes.  These are the most Muppet-like of the characters.  No facial expression at all.  But hey, Henson's first real fantasy film.  Give him some credit.  Jen and Kira bond as the Podlings bounce around and play music.  Again, Garthim show up uninvited.  Kira orchestrates their escape with the Landstriders, which have walrus-like faces and very long and thin legs.  They run quite quickly.  Performers in those suits had to practice for weeks on the stilts, until they could indeed run on all fours most expediently.  As for the poor schmoes in the 70-pound Garthim suits, they lasted about a minute per take.  It's not just the weight of many of these costumes, but the awkward positions the puppeteers have to twist body and limb into.

Jen and Kira sneak their way into the Skeksis' castle.  We see that the Crystal can be used to drain the lifeforce from anyone, including Gelflings, whose essences rejuvenate the Skeksis far longer than most others'.  Kira saves herself by calling to the animals caged in the laboratory - a little trick she picked up from the Podlings.  They freak, break free, then kill their Skeksis captor.  Whoops - there goes his counterpart Mystic, too!

Jen finally manages to heal the Crystal just in time for the Convergence, causing the Mystics and Skeksis to merge into their former selves, the Urskeks.  And that whole splitting thing turned out to be their own fault.  They'd gotten too full of themselves, apparently.

Verdict:  This really is a kickass fantasy film.  One of my favorites, in fact.  It's called the Dark Crystal for a reason, though, so any parent leaving their 4 year old alone with this movie had better be prepared to explain why those giant black crab monsters won't be crashing through his/her bedroom wall any time soon.  Which reminds me that I need to give Mom a call for that monthly peptalk.