The opening of the pseudogap in underdoped cuprates breaks up the Fermi surface, which may lead to a breakup of the d-wave order parameter into two subband amplitudes and a low energy Leggett mode due to phase fluctuations between them. This causes a large increase in the temperature range of superconducting fluctuations with an overdamped Leggett mode. Almost resonant scattering of inter-subband phonons to a state with a pair of Leggett modes causes anomalously strong damping. In the ordered state, the Leggett mode develops a finite energy, suppressing the anomalous phonon damping but leading to an anomaly in the phonon dispersion.