Nice to see you using some hard brushes there man, you work is getting better... I think its suffering a bit from a cell shaded look(i know you're going for the .GIF look but still) I would soften up the non-shadow edges(the hard edges by the ahdows are looking good) and work on your transitions esp on large parts like the…
How about not making it smudgey to begin with? You really are making it more difficult for yourself by putting effort into doing that in the first place... just flesh him out using areas of flat colours (areas larger than 1 pixel, don't get smart with me, heh), and use some transparant brushes to add some early shading,…