Hey Dex, this is looking an order of magnitude better then the original. Good work.
But, I have to say I think there is a fundamental flaw in the piece, which is that it seems there is a direct line of sight between the monster and the boy. It looks like they see each other. It would probably require a massive rework of everything to change this, so I don't expect you to at all. I just didn't see anyone mention this, and thought it could be important.
Besides that, the pixel technique is excellent in many areas, especially the rocks (great dithering) and water (the reflections actually look like reflections).