Beware of the word 'value' in this context, as it's what the V in HSV means (you'd say 'brightness' in ordinary language; it's what remains when all color information is withheld).
I only see the cast shadow as blue, not the shaded parts of the dragon itself. Compare with 9_6's edit.
Also it seems you turned down all saturation: that's not the idea!
Breakdown of both your latest version and 9_6's edit.
The most saturated colors now are the outline dark green (052807), then the browns (there's still one single pixel of 034917 btw, you can find it by hovering over the palette swatches). The idea is rather to create a palette that has a range of values and saturations, so you can find a suitable color for every use in your piece.
Generally, colors get more saturated the more shaded they are.
This is one way to do it, I wouldn't say it's the best for this piece though, although 9_6's edit is the best and my fave so far =)
Cartoons would rather use highest sat in the mid-ranges, I think, and saturated highlights can give some vibrancy (rather advanced though!).
Take your time about it. Palette construction is no easy sport. Search here and on the PJ forum for threads specific about this. Might post some links later.
Also a good exercise is to use a pre-set palette, either from a palette challenge or some vintage system specs. If you can grab an 8-color palette somewhere (the crazier the better!), you'll learn a lot about color
use through the restrictions, and that will in turn help you create your own, later.
