Just dropping by to say how awesome this is! Great usage of palette, depiction of anatomy and cloth, and lighting!
You should probably keep the witch's face closer to Helm's brilliant edit. It's clear what you're trying to do with her teeth, but somehow it doesn't work too well. The jester is giving me nightmares... something about that top he's wearing is just disturbing
The way you're placing the books, combined with the rest of the composition, will draw too much attention to them i think, since they will be occupying 50% of visual space... maybe put them at level with the witch's head, and make them take about half the size you have right now.
Looking forward to see further progress!
P.S.: 354x267 pixels? Is that like 320x240 with borders for help with composition, or what?