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(disclaimer: only the left picture is certified, the right one is ignoring the C64 restrictions here - just a color test)
A solid gray background looks interesting... But I think this contrasts to the style of all the mockups I made so far (with a black background). I had to test it, but I couldn't make it significantly better. I think a need a little break from drawing backgrounds, maybe some ideas will fly by then.
I understand now what you meant with embracing and I like the new dithering on the rock golem. (in fact, this was the 3rd or 4th try to draw a golem) I also tried to "camouflage" the wide pixels in the green mockup by drawing some edgy plants, but in the end Helm's dithering looks better although you see the wide pixels clearly.
By the way, the C64 has no "vram" for sprites. It just gets the sprite data from the standard memory. So you do not have to copy sprite data if all your sprites fit in a 16k memory bank.
mrsid! Just great, man! "in a few minutes", eh?

Thanks for the pixel-hints at the elevator. I guess there are even more nasty blocks with some "forbitten" pixels. It's hard to see without a check program. Thanks for attesting these restrictions, I was actually getting anxious and about to remove some bats. The hires sprites look supercool in the emulator, ha! Too much brown in the background, maybe.
Update! Had a few minutes... yada yada yada... animations and stuff, here we go:

Here's an update of the hero, using Adam's excellent pose. Like this, the global sprite colors are orange and yellow. (dark grey might not be the best color for sprites if the background isn't black)
A) medium grey outlines do not blend with background (but blends to skin color a bit)
B) dark grey works nice with black background (but blends with brown and blue backgrounds a bit) Yes, I know... black outlines do solve these problems... I just don't like them, haven't decided, yet.
C) test with taller legs (better?)
D) ptoings safari-hat
E) no hat
F) alternate head - I like the big head in the idle pose, but I do not like it animated. Maybe because he has to look more to the right, but then the head looks worse.

running: not half bad, a bit stiff maybe. Looks a bit like he has swallowed a broom. Couldn't get it better, though. Also tested accelleration an friction here.

jumping: jumps immediately, but pauses a bit after landing...

crouching: 2 versions, which is better? What is crouching good for, anyway? In some games you can avoid bullets. Ridiculous... It doesn't have any planned purpose for now. But I have the animation frame anyway.

attacking: the 3 attacks... whipping and throwing are using the same animation. Shooting looks a bit stiff again. All animations do not change the legs, couldn't find a good way to do it. Any of the attack animations utilize 1 additional sprite. (which has to be reserved for the player) The 2nd animation is for being hit by an enemy.

digging: An archaeologist has to dig somewhere, right? Since we have this reserved sprite, I could add some dust while digging.

elevators: I mad a mistake in the previous elevator animation, the rack rail in the background vanishes if the elevator is halfway on the block. I could fix that by reserving another 32 blocks, then it would be smooth again. But is this necessary? (Yes, Mummies like to ride the elevator) The 2nd animation is a test for an elevator in "slam-mode"! (so I can use the blocks as elevators, doors and traps)

"How would Indy pass these traps?"