Hey man:
First of all, i think you could add a more interesting dither pattern to the mushroom, as right now it seems too simple.
Second of all, the casting of shadows needs to be more pronounced; right now those whitey things are popping quite a lot (according to the way you shaded and highlighted them), so, they need a bigger casting of shadow upon the mushroom itself otherwise make them a bit more "inner"; this can be done by removing the highlight on top and decreasing the shadow below, or either increasing the shadow below.
I like the colour pallette, but you could make things more interesting, integrating a few of these colours in other parts; for instance, that deep blue could be used instead of that blood red on the bottom of the head of the mushroom.
Like i said the casting of shadows is off, and the mushroom isnt really well colored according to the lightsource; there could be a counter reflection (forgetting the name here, sorry) common in round/ball figures, on the bottom of the head, and the actual part that holds the head should be much darker, and there you could include some nifty light effects.
The way the grass is shaded doesnt respond to the lightsource of the mushroom either, i imagine that since the lightsource is casted directly over the top of the mushroom, it blocks the direct light on the grass (wich here doesnt appear to be the case)
The shape itself i like, but maybe the curves could be done on a more stylized way, i could probably edit if you want, since its hard to explain.
I would also reccommend converting this into a complete mini-scene, as i definetely see potential in it.
Keep at it, and just give a shout if you need an edit.
Hope to see some progress in this.
-Krut.