Except that our weapons do not have any elemental power and I don't think we'll add some.

Well, the weapons wouldn't necessarily have to 'posess' the power of the respective element, just be related to it. For instance: clubs, quarterstaffs,  obsidian spears, and the like would fall under the earth element, since they relate to a land-based resource like wood or stone. Weapons with forged blades would represent the fire element. The wind element would be comprised of ranged weapons or higher-tech stuff. The water element could represent weapons made from its resources like a swordfish sword, a reed blowgun, or a coral blade lance. All magic weapons fall under the spirit weapon category.

You should have five backgrounds for the weapon "portraits", one for each point on the pentacle. The four standard ones would correspond to earth, wind, fire, and water while the fifth could be a spiritual element (for holy/unholy blessed/cursed weapons).

And only 966 colors! 

Working there crushes your soul.

Feedback consists of either 'yes' or 'no', hence a total lack of art direction. A former coworker artist made over 30 portraits in almost as many styles and in the end they told him to take photos from Google image search, shrink them, and index them.

With another project, they changed their minds about the graphical style (despite the fact they picked the first one) when the project was a month or so away from beta. They had a coworker redo all the sprites and animations (250+ animations), then changed their minds AGAIN afterwards. They justified it by saying they couldn't get a sense of the style with only a few mockups; they needed to see the entire game in a style.

Everyone starting at GL is treated like they're entry level, regardless of their past experience. They had one of the designers from Everquest, but ignored all his ideas and put him on an "adult" puzzle game instead (he left soon after). When they hired Christian Robert (Flashback, Cruise for a Corpse), the manager told me he would probably be promoted to a senior artist position in a few years. (He already has over 15 years experience).

They laid off a programmer who worked on DOOM III, only to realize their mistake a week later. They tried to get him back, but it was too late.

Alex, the senior artist you talked to quit mere months afterwards.

It varies on the place, but for a staff position you're generally looking at something around 40k USD/year (entry) with some benefits (health, dental?). Although this isn't great pay, since pixel art is such a specific skill, if you're willing to relocate it's fairly easy to find work.

Most freelance jobs work around an hourly rate, which will be a higher number than if you did the division on the annual salary (taxes, private insurance, etc.). I'd say $30/hour is a fair freelance rate for pixel art.

Advertising is a solid route for an artist to make money, just be aware that it takes much more than a knowledge of art or graphic design.

P.S. Avoid Gameloft like the plague. Their 'system' results in an over 50% turnover (NYC office). To give you an idea, by the end of my 10 month employment, every artist that was there before me had quit (all but one within five months). They were giving out 1k bonuses if someone you recommended got hired, but none of us would wish that fate on an enemy, much less an acquaintance or a friend. 
(I think ripping art from other games, shrinking and digitizing photos, and working with art mis-direction got us depressed.)