[Redwizard]

Ok this looks like a big leap but it isnt really. Using the smudge tool i have managed to blend the blackness in with the blue. (The reason ive converted it to a desaturated blue was because its one of the good colours to see pixel-jaggedy stuff). so far ive used red to mould the shape, black for the windows, and changed it to blue and then softened the edges.
I have also added a highlight to the bottom left of the roof. before i did all this, i selected the roof, and used the burn tool to darken the top right of the roof a bit.

And i thank you butz :-)