Couple of things:
1. First thing's first. You've gone and turned the pants into a bit of a mess of noise. It looks almost as if you're trying your best to get rid of jaggies by placing intermediary shades, which is looking very confusing. It may be better to just forget the AA for now, and focus on getting the main forms down with the light and shadow. You'll notice in my edit that while I dithered a bit here and there, for the most part I retained patches of solid color.
2. While you're starting to get away from the pillow shading, there still doesn't appear to be a very defined light source (not that my edit was fantastic in that regard). It's better than the first effort, but could use improvement. Again, rough out the main forms first.
3. It looks like you've started to define some folds and drapery in the pants, which is good, but they're pretty haphazard right now, especially around the knee and lower leg. The bunching around his left ankle seems a bit arbitrary. Throw on some pants, and take pictures.

4. You've lengthened the legs, but they're still too short. A good rule of thumb is that armpit/clavicle to mid-crotch should be roughly the same distance as mid-crotch to knee should be same distance as knee to foot.
5. Lack of contrast. You've added a darker shade (which is barely in use), but you've also
reduced the lightest shades by the same amount. The usage of these has improved somewhat, but the overall contrast is still lacking. You've also got 5 shades, though the two brightest shades are exactly the same value, just with different saturation levels. Bump that "highlight" color up a notch or two in value.
6. Hue shift. Or lack thereof. Your shades at the moment are exactly the same hue throughout, and are the equivalent of the mistake in traditional media of adding black or white to a color in order to lighten or darken it. Try some hue shifts. In my edit, the hue on the jeans runs from about 200 to 260 (on a 360 hue ramp), with warm darks and cool lights. (Note that it's possible to widen that gap even further if you wish).

I actually cheated in that. The two lightest are the same hue. I musta forgotten to hue shift when picking my lightest. :X
Uh, I can't think of any more offhand. Hope that wasn't too harsh or anything... >_<