There is a difference between having a lightsource where the camera is and pillow shading, even though it's sublte. Here is the difference. In the RPG view, the light should be coming from directly ahead, the top of their head should be lightest, not the face. 

Taking a bit longer than a day. Pixelling with less pixels is hard (._.)

But wouldn't it look akward to not do pillowshading on the heads since it's an RPG view and the light is coming from directly above? Yeah, that's a bad problem with the squid that I'll try to fix. I'll post a second a version later today with much less colors. And yeah, I have a tendency to pack as many pixels as I can into something really small :P. Thank you so very much for the helpful comment, I will definitely make those changes.

EDIT: I got inspiration for the squids from this http://www.pixeljoint.com/files/icons/full/storm_fortunesquid.png but isn't the shading (paricularly on the head) pillow shaded like mine? I'm just curious to know the differences, but thanks again for the helpful advice!

EDIT2: I read cures pixel art tutorial again and I think I'm getting it better at understanding it again :P

I think you're using too many colors than you know what to do with. You seem to do well when you have just one base color and one shading color, I think you should revert to that. And there's too much AA, it's not crisp and stand-outy.  And be careful not to pillow shade, because you definitely did on the squids head, and that's one of the pixel arts 7 deadly sins. 

hah, i like the prewiew. it'll be cool to see a shapeshifter like this)