I really liked it. There's acool twist in this piece.

Very good interpretation!

 Thanks a lot too! I might go ahead and do another one that's more sprite-y, just depends on time. 

 Thanks a lot for the input, I went ahead and put up an update. Thanks again! 

As long as it isn't explicit stated that this isn't allowed, it is allowed. Creative interpretation of rules is still creative work and should be respected in an artist community. Of course, keep in mind that this is just my opinion.

Also what Manupix said. And if you should change it, it should be before the voting starts.

I think you should keep the bg and crop it in some different shape to meet the transp criteria.

No idea if it will make it in or not. The challenge calls for a reinterpretation of a sprite: it's unclear whether the result has to be a sprite too. I'd personally say it's fine, though ;)