While the film would show Jeff Bridges' Obadiah getting fried and killed, Bridges' says that was not what went down in the original draft of the film script. Bridges shares what originally was supposed to happen with with his character in Iron Man in an interview with Cinemablend:
In the original script they were supposed to open my suit after, and I was gone! But then, no. I read the scene we were shooting, and they said, 'No, you're dead.' And I said, 'Oh...' Then they said, 'Well, it's a comic! Maybe you'll come back!' I don't know.
Alas the MCU has done less retconning than the comics, and Jeff Bridges has not found his way back into the picture through some weird plotline. Not exactly a crying shame as I'm sure fans have long forgotten his villain after all the Marvel films that came past the original Iron Man, but still a cool factoid to know! Would you have liked to see Bridges in more than one film as Obadiah?