I like where it's going, the new version is already quite an improvement over the previous one, in my opinion.
I think the main problem right now is that it's too noisy, which makes the forms a bit difficult to read. Try shading the larger forms first, and add details only after they are readable .
I did a quick paint-over (pixelover) to show my point:
You can see that I removed a lot of the texture but kept hints of it in some areas such as the beard and top of the cap, I think it's more readable this way.
And on a sidenote- I only used colors from your original palette, but managed to reduce the color count from 24 to 13 (and it can definitely be reduced further). It's not crucial if you're not actually developing work for a technically limited hardware , but I find that limiting my palette makes me think differently about the use of color and the ways colors interact in a pixel based piece, It's something worth paying attention to .