I'd be tempted to use different color temperature for the light and shadow, but... somehow I think it works with plain grays if the BG color doesn't upset that.
Regarding the lost lines and "sel-out", it's always a real struggle. Hard to tell with this rather bright forum background color. Do watch out for what will happen with the legs against a darker BG. Hmm, Editing the .windowbg2 color in the forum CSS with webdeveloper. I think the problem with the sel-out on the head is that it makes the head look wobbly against certain background colors, and in some cases the edge pixels appear to be (nonsense) details which doesn't contribute to the design.
The eyes are indeed sort of lost, but the question is whether the eyes are important to the definition of the character. if they are not that important, a low contrast version might work.