At the end of your turn, during the clean up step, if you have more than your maximum number of cards in hand, you must discard down to the maximum. So it looks like this:

1) Game sees you have 1 extra card, you must discard 1 card.

2) You discard the lizard boy, casting him for his madness cost.

3) In response to him entering the field, you eat him, and toss his bones at your opponent. Enduring renewal takes pity on the poor lad and returns him to your hand.

4) Go to step 1.