I've found that with extreme stretches like this, posing the head can still lead to deformations. But posing the neck works very nicely. I'm assuming (and hoping) though that with mild variations in the y-scale, one will be able to pose both the head and neck normally.

Edit: Well, when the neck is shortened, head turns become more problematic. Little stretches such as, say, 120% seem to be fine, though. I might just make a JCM for head/neck turns at some point, because I don't think it's possible to make a turned neck look good without one.

-- I'm not mad at you, just Westphalian.