Mechanically, I'm pretty sure that he can (he's a lich, he's epic level, he's got the Craft Wondrous Item feat because he needed it to become a lich in the first place), but would he? Would he drop the rest of his body, embed some shiny soul gems in his skull, accept the higher level adjustments, & become a demilich?

Bonus Question: Would becoming a demilich make him too powerful for the Order of the Stick to beat him?