Darien, I think you're the only one who's barely even close to the style, I wouldnt worry so much about the segmented muscles, just add a white tone and a black tone, then use that to smooth both ends of the spectrum a little, you should have enough tones with that.
frankly I think it's a waste of time to try and analyze the way this was pixeled, there was obviously a indexed transparency tool involved in the pixelling of all this, it's painfully obvious from the way the shading transforms in every frame of animation, take for example the shoulder movement in Firebrand's flying animation.