No, it is a png, but the original illustration wasn't really a good work of pixel art. Background dithering is excesive indeed. This is just the result of one of my old first attempts at making pixel images that I recovered from my hard drive.

I like the whole piece, but as eriophora said, it would be better if the shading style for all of the drawings is the same.

And I'm not sure, but did you save the drawing as a jpg? Because the quality is not that good.

Very nice!

I feel like the style of the mouse and of the background are a little conflicting. The background is highly textured with lots of dither. The mouse is very flat-coloured. Neither one is bad, but I'd either tone down the background (particularly the grass) or make the mouse a bit more textured, I think. 

Hahaha this is great!

Awesome character/game idea and great pixel art :- )

Edit: apart from the quality of the picture that seems to be broken o.o