Which army does the Couatl belong with-Amazons, Lizards or Pygmy?
OR should it just be an independent creature as i believe they were originally Good aligned which doesn't really fit with any of the Lustrian humanoid races?
According to the 2nd/3rd Edition fluff, none of them, they were listed as an intelligent race in their own right. They were worshipped by the Slann, but they avoided humans, and the pygmies hunted them so they actively disliked them.
I recently bought one, I was planning on using it in my Slann army as a 'guest' of some sort, currently part way through painting it:
I tend to think they could have been included as Slann allies as long as pigmies are not present, but it seems they were not in the "official" army list anywhere.
I suppose it depends who is fighting.
If you have Slann vs Skaven or Amazons vs Chaos having one as an ally seems ok, if you have Amazons vs Slann who knows?