The problem used to be that it was common knowledge that Eugene was Bischoff's nephew, and turning him would suggest that Bischoff was either in on it as well, or that Bischoff and the rest of his family were being fooled from Eugene's birth. The latter idea isn't really feasable in storyline sense.
However, knowing the WWE's way of thinking they'll probably second guess our intellect and completely ignore his relation to Bischoff. Remember, the WWE thinks we're so stupid that they replay an entire segment that aired just before a comercial break
after the same break...in case we forgot.
So yeah...I think it's feasable to do something like this. The turn might end up in Wrestlecrap someday, but it's pretty likely that Eugene's gonna end up there either way.
Another idea would be to have a love story build up between a wrestler and a diva, then have Eugene constantly "accidentally" walk in on their promos. He'll do something innocent and cute, and the diva will swoon over how cute it is. Eugene will continue the cute act until the diva starts in with the hugs and kisses on the cheek. The wrestler boyfriend will start to get jealous of the whole thing and will start to appear like a heel.
THen in a massive turn, Eugene starts with his act again but he'll say that his family is going on a trip and he'll have to spend an entire week by himself at home...and he'll be aaallllll aloooonne.
"I guess I can stay with you, Eugene" says the diva, completely ignoring her plans with the wrestler to go to a special resort or on a cruise throughout the week. The wrestler will be burning up, but he can't say anything because his diva girlfriend has yelled at him once already about his jealousy problem. Then, when the diva leaves, Eugene stands there biting his thumbnail and watches her walk away. When she's gone, he completely breaks character and says, "DAMN! That's one FINE piece of ass!" Slaps the wrestler on the shoulder and walks away with a "Smell ya later, chief!"