Extend the legs forward a bit more, make the arms swing more counter to the leg movement (when a leg goes back, the arm should come forward) and show both arms, atleast when the back arm extends forward. If you added some rotation to the torso and head it would help allot too.

Still off. I get that you are going for baggy pants, the issue is that they are hanging straight down instead of following her legs. the one you have now on the far left her leg would actually be phasing through the pants (below the sword blade, above the shoe) see how on the right, the pants are a few pixels over the shoe? try doing that on the left, and then rather then make the line go straight down, make it a diagonal from the hip to the bottom of the pants. That wont actually look right, as she will basically end up dressed as MC hammer, but it will give you a slightly better idea of the angle the pants should be hanging at.
If you look at this sprite from the ill fated neo geo pocket -> you will notice her sleeves are EXTREMELY baggy, more so then your pants, but they still hang off of her arm. Gravity is pulling them down, but the highest point is still the thing they are actually contacting (because gravity doesnt make things phase through other things, at least, assuming the are solid.)
What you just did with the pants is basically the opposite of that, with the lowest point that should be hanging being moved towards the underside of the thing above it, and gravity pulling the upper part of the pant leg directly through the leg below it.

His shoes are changing colors, also the shading on his chest kinda lags right after he reaches his highest point and looks a little wonky... Mostly the shoes though.

keep the new one, it may be harder to animate, but it looks way better.

Huh... Im not sure there's a good solution to that. I think if its in rotation, and no more then doublesized in game, you could get away with using the third rejected frame just fine, otherwise, Im almost tempted to suggest using another color for a near highlight, but that seems lame seeing as it would only be on 1 or 2 pixels, ever...
Honestly, I have seen allot of sprites that flat out lost there highlights on in between frames, and it wasnt to noticeable (I mean... other then the fact that I saw it... so I guess it was noticeable, but I wasn't like "holy crap that looks awful, look! It lost its highlight in that in between frame!" I mean, I at least wasn't like that after about the third time I did it and my girlfriend rolled her eyes at me... these parenthesis where meant to be more reassuring then they are...)
Otherwise, it looks rad, although it doesnt really read as an eye, you may want to give it a white, or use a color that's totally unrelated to the spikes for the retina or something... Maybe make the pupil round? Probably doing all of those is unnecessary, but experiment.