Okay first off I am a color hog, so working with only 11 colors is not my strong point.
I edited your monster a bit and realized it would take me hours to fix it the way I was planning, so instead I blew it up 10x, painted over it, then shrunk it back down.
So here is basically what I had in mind for improvements. If you can do this with 11 colors your a pixel god
Basic points:
Fix the the teeth, they look all out of whack and the highlighting doesn't look consistant.
Use the highlights to give the tentacles depth. Don't highlight ( so much ) something that is not directly in the light. I tried to illustrate this with my edit.
Oh ya fix the light source so it looks consistent. I tried to show this with my edit.
Don't go overboard with the highlights and make the skin look like metal like I did with my edit
You have a nice wet look going right now, it just needs proper direction.
An ambient light source would do wonders. I tried to do this with the purple and light blue.