Q: Why did Yosef have Yaakov embalmed?!  Embalming is prohibited by the Torah!  Also why didn't Yosef bury Yaakov right away as is the halachic way?

Many Sages say that Yosef was following his father's orders, "His sons did for him exactly as he had instructed them" (v12) 

According to the Zohar... do not think, it says, that Yosef ordered the embalming to preserve his father's body for the long journey to Kenaan.  In embalming him, he was following his father's wish.  Having reached the highest degree of holiness, Yaakov's body was free of all impurity.  Yaakov resembled Adam, physically and spiritually, and his life complemented Adam's.  Accordingly, his body was to rest in the Cave of Machpelah beside Adam's body, which, as it had been created by the hand of G-d, remained for all time in its original condition.  Therefore it was "fitting and proper" that the body of Yaakov should also remain intact.  And it is in this sense that the Zohar understands the phrase "Yaakov avinu lo met" (The body of a holy man who dies by the Divine kiss is not affected by impurity - Ramban on
BaMidbar 19:2; Tosafot to Ketubot 103b)

50:2  Above, in Toledot, we have written that until the body decays, the deceased cannot rest in peace.  This, however, is only true of the average person, who has sinned and has the trait of jealously.  Since body and soul together must be punished after death, as long as the body endures, the soul has anguish.  Just as body and soul sinned together, they are punished together as we have discussed in the Portion of Bereishit.  Therefore, until the body decays in the grave, the soul cannot leave.

This, however, is not true of tzaddikim (saints).  Their bodies can remain preserved for a long time without becoming wormy or decaying, but their souls have no anguish.  As soon as their souls leave their bodies, they ascend to a special place under the Throne of Glory. (Chesed LeAvraham 4:53)