I can go into more detail later but a few takes on this line of thought:

Dwarves: As a Lawful Evil race, dwarven culture becomes oppressive and warlike. Droves of slave miners churn out iron and coal, labor in the forges and foundries becomes no more than glorified slave work, not providing nearly enough earnings to escape the lash. The only way out of servitude for the common folk is by enlisting into their armies, which is in most cases certain death, as they slaughter deserters and never surrender. Decimation keeps them in line not only in militant groups, but in labor as well. The weakest of every ten is executed each month, a way to instill fear into the inefficient. Meanwhile, their lords hoard the wealth of the many in vast chambers and vaults, hiding away in their halls for fear of being overthrown. Assassination and coup d'etat is a common practice, creating a system similar to Byzantine politics.

The dwarven distrust of magic transforms into sheer hatred, with witch burnings being common among them. Stronger still is their hate of elves, who make up the vast majority of their slaves.

Dwarves and dragons go hand in hand in this scenario, and at least one dwarven kingdom finds itself under one's rule.

Elves: As a Chaotic Evil race, elves become the scourge of the earth, burning and looting entire kingdoms as their hordes sweep across the map. Their magics become twisted and vile, driven by blood and ritual sacrifice. Their favored tool of destruction, be it arcane or mundane, is fire. They view the phenomenon as a cleansing of the impurity of life, and seek to set the world aflame to purify it , giving it back to their gods.

The elves despise dwarves for their sciences, as they see progress as a crime against nature. They often kill them on sight.

Gnomes: Since they have been attributed as Chaotic Evil, the normally burrow-dwelling gnomes become the very face of death. They dwell in ancient tombs and catacombs, able to subsist on maggots, mold, rotting meat, and other unsavory sustenance. They are drawn to cemeteries, sewers, and barrows of other races, as it provides them with "fresh" food and stock for their dark magic. Gnomes are learned in the art of necromancy and illusion, making themselves invisible to their hosts and creating undead wardens to stave off extermination. They are even known to feed on zombified servants, picking the bones clean until they are mere skeletons. They have a tendency to use illusions and enchantments to lure the surface dwellers into their abodes, where they are quickly slaughtered by unseen assailants.

Gnomes are alarmingly common among dwarves, as their methods of decimation creates a steady supply of food. While most dwarven cities are unaware of their presence, those that are have two ways of dealing with them. Most cremate their dead to starve them out, while a few offer sacrifice in return for a steady supply of undead labor.

Goblins: As a race of Chaotic Good creatures, goblins live in harmony with the world around them. As fear becomes pacifism, they have an aversion to blood and pain among others, and thus feed mainly on grubs, mushrooms, berries, and roots. They were driven into the fringes of the world by the burning wrath of the elves, and are forced further with each passing year.

Goblins have a love of story telling and adventure, and have an oral history predating any form of writing. They revere the spirits of every animal, every mountain, and every tree. Their art is mainly in paintings on standing stones and caves, which is a practice they have maintained for countless generations.

Halflings: As Neutral Evil creatures, halflings become gluttonous and decadent, bearing a hunger and thirst that can never be sated. Their wealthy consume far more than would be possible of other races and still remain thin, while the masses starve as they labor to feed the few. Their reclusive nature becomes xenophobic, and they see all others as no more than animals. Consuming the flesh of other peoples is common among them.

Halflings specialize in thievery, bounty hunting, poisoning, and the most vile alchemy, as their curiosity turns to greed and their love of brewing turns to the vilest arts. While they have no armies of their own, their assassins keep them an object of fear, as no ruler in their right mind would dare risk their retribution.

Kobolds: As they have become a Lawful Good race, kobolds are preservers of knowledge and keepers of ancient scrolls. Their stonework is unparalleled, even among the dwarves, and they can produce wonders such as massive sliding doors, aqueducts, and even running water without the use of even basic metals. Their abodes are nerworks of stone halls carved into the faces of mountains and cliffs, the entries masked by vegetation and the halls lined with shelves upon shelves of scrolls. Their chambers are known best perhaps for their courtyards, as networks of skylights allow the sun to shed light even into the lowest chambers. They can therefore tend crops on the upper levels, taking in their water from canals that run on the edges of every hall and chamber, and grow trees, flowers, and grasses in soil-filled centers of otherwise stone and tile chambers.

Perhaps the greatest love of the kobolds is sculpting. Statues of great heroes and gods decorate fountains and villas, many depicted reaching out to passers by as if in offering. The religious nature of kobolds is one of study and meditation, and many chambers are devoted to quiet contemplation.