Wow Terley, that really made a world of difference! I tried your sprite in my game just to see if it would work rotated to, and it did! It really gives it a better depth feeling. You don't really notice that the tanks have different light-sources in-game anyway.
So I'm going to have a go at this too - but I'll leave the turret shadow casting to the engine, as they will be rotated separately.
In the meantime, what are your impressions of my soldier graphic?
A side question - what do you guys use for animating? I'm using Photoshop for pixelling, which I feel quite at home with, and guess I could use Imageready, which I also have, but I'd really like to have something simpler with more features to make animating easier.
Edit: Here's my new version with a moved light-source. The lower images have added drop shadows with semi-transparency (which will be similar to how they're finally rendered in-game), so they are not true to the palette.
C+C on both the tank and the soldier appreciated!