You could use a solid colour like you did, that's the easiest way. Equally easy, and more common, is to omit the shadow entirely. Most people only include cast shadows when posting mock-ups rather than standalone sprites.
Semi-transparency within an image (as opposed to overlaying opaque pixels to create new colours) is tricky, and it may or may not be allowed based on the moderator's interpretation of rule 5. Perhaps that's something to bring up for community discussion in the chatbox or on the forum xP
Okay, however in that case can I make the monster shadow semi-transparent instead of being fully opaque? I believe I've had issues with semi-transparency before.
Please submit sprites with transparent backgrounds unless you've got an actual background (e.g. a scene, or something decorative) for them, the rules ask for it.
you could also dither the shadow.