Kill the diggle! Grab its eggs! Make Diggle Grog! Get achevement! Trade the stupid coupon away!

Dunno how I managed to miss viewing this one, great use of EGA palette.

 Here's a super early version with little dithering: http://img94.imageshack.us/img94/1573/egadungeonsofdredmor.png

At the very least, the dithering on the leather armor was necessary because without dithering it looked like it was red under light  instead of being a darkened brown under shadow.

 Nice. I disagree with the pusher person, since the light source is on the back, and from that logic, things closer to us should be darker and harder to see.

But I still hate dithering and think this piece would be way better with less of it. :P
Still, good job.

 I think the character in the foreground should have less dithering than the one in the back. The sense of depth is getting messed up.

 Like it.

Pretty much, yeah.

 Well, that is rather stylish and nice disguise of the global palette(I assume its the sword).