Excuse the double post, but I thought I'd try to elaborate on the template color issues. The issues, as Ven pointed out awhile ago, is using a color pallete for a MUCH larger sprite, on a little guy. With such a small, and finely detailed little guy, you need to add some colors that give depth, in this case, I recommend purple.
I illustrate the issue, and something of a fix below. I have added some purple, and changed up the pallete a little. Subtle differences, I know, but, imho, it makes a difference.
![](http://img130.imageshack.us/img130/1079/koemushitweak.png)