This is directly inspired by other images on this site, and is more of a
practice in shading and textures with a limited pallete than anything
else. Any suggestions on what I could do better would be much
appreciated.

Actually, the dithering doesn't look good at all on the edit. It doesn't look smooth, it looks VERY fake. Way over doing it. One thing that might help is making the dithering a little different for each shade, so it doesn't look so much like it was generated. Also unequal spacing would help.

The clouds should have one more highlight, because right now it looks a little flat. Keep the lightest shade, and make one lighter shade for the highlights.

Ok, I have to comment once more on this.

If you look at a great tutorial by Adarias here you will see that you should not dither like that. I personally think that any piece using diamond dithering is instantly ruined, unless it is stylistic, but that is still pushing it.

If you look around the site, you will se that Adarias is possibly one of the best pixel artists around.

The point of dithering is to smoothen out colors without using a lot of colors like AA sometimes can. Using blocky diamonds, or the bars/ the dithering with dots placed one pixel apart like on the sky in his edit looks horribly unrealistic. While you may not be striving for realism really, it should at least seem partially realistic. Just looking at it makes my stomach churn. I'm not realy claiming to be a great pixel artist (we all know I'm not) but it looks so stupid. I find it to be as bad as or even worse than pillow shading. If you look at the clouds in real life (I don't really get out much, but I still look at the sky) and you squint a little, you might be able to see the individual shades a little, and if you can see it like I do after being on the computer for hours, you might be able to picture realistic dithering by maybe stoven or someone equally great. You would not picture some huge ugly diamonds sticking out around the edge of each color of the cloud.

Ok, basicly what I'm saying is NEVER use diamond dithering.

Thank you,

Wannahlakujuu

Edited by Wannahlakujuu

The point of the edit wasn't to tell him how to dither, only to give some example of dithering.

I'm confused, is the diamond dithering advice here towards
DrunkyDuck's edit or the original?

I'm not going to comment on the sky since that has been done before, instead I will focus on the clouds and the floating Ruins;
The lightsource seems a bit of, as if there where 2 lightsources, one directly from the top (clouds) and the other from the top right (ruins). 

Also, the brown rocks seem a bit flat and undefined to me; to improve this, you could loosen the dithering here and there, as well as adding one more shadow-shade here and there. it could work pretty well with your darkest brick shade.