Exactly how proud IS punch? *smile* I've never "got" that saying.
Proud as a pickle, on the other hand, makes perfect sense! lol
I've always heard "pleased as punch", which I think may be a reference to Punch-and-Judy shows, which are puppet shows popular in Europe. Or England. Or they were when the English children's books I was raised on were written.
Punch is very proud if you put enough rum in it! ;-D