Longer line segments (like those on the lowered arm) need longer AA segments, it's not enough to just have a pixel of each AA colour.
The AA segment should fade between the two main colours. So, if you have just one pixel of AA, its colour should be approximately halfway between the two colours. If you AA with a very light or very dark colour, then it doesn't really soften the blockiness.
Vertical, horizontal, 45-degree diagonal, and very short lines usually need no AA at all. Adding AA to them just makes the image look blurry and doesn't help those lines look smooth because they're already smooth. When using multiple colours for AA, their values should evenly cover the value range between the colours you're blending between.
I recommend starting with just one AA colour. It's much easier to learn the basics of AA that way, and then you can move on to multiple colours (which is, in essense, AAing your AA xP).
Here's a partial edit that incorporates what I said. In particular, pay attention to how much of your AA I removed, and how that helps the piece look crisp rather than blurry.
(I didn't do much with the beard because I wasn't sure if you were going for lighter/thinner lines there or not.)