Goro looks great. Basing the artwork on Tobias's concept is definitely the way to go IMO, and I think the latest version of the face shows great improvement. I think his forehead could perhaps be a little more sloped to give him somewhat of a Neanderthal look, and his eyes probably a smidgeon bigger, but you're definitely headed in the right direction.
One thing I was planning to write about last night before I had to leave, was the Palace Gates stage being worked on by calactyte. While I appreciate the work that has gone into it, I do think the stage has some fundamental problems which are both distracting and keeping it from reaching the level of quality it needs. Simply put, the major issue with the stage as it stands, is that it lacks a sense of cohesion and consistency. It feels less like a real place and more like a collage of separate pictures pasted together. This is course how the original levels were created, and it's not necessarily an illegitimate creation method, but as long as it LOOKS that way, it won't look good. I will try to pinpoint and explain what's causing this, and offer my best advice for remedying it.
What immediately jumped out at me when looking at the pictures is the lighting - it's very problematic. For a picture to look believable, it needs consistent lighting. Being an open, sunny area, it should essentially be lit by one light source - the sun - and we can assume that the sunlight is more or less coming from straight above, preferably from slightly behind the camera (so the side of things we're seeing is at least partly lit). This light angle is also helpful because the generic lighting on the characters won't make them look too out of place. However, when looking at the stage, the lighting is truly all over the place. Let me try to illustrate:
Green arrows indicate light coming from the camera, white arrows indicate light coming from straight above, magenta arrows indicate light coming towards the camera from the background, and blue arrows indicate light coming from the left or right, perpendicular to the direction of the camera. Essentially, every item placed on the stage has its own light source, which creates a very schizophrenic look, and nothing really gels with anything else. If we're going for the light coming from straight above (which may be up for debate, but for the sake of argument just roll with it), the only things that look the way they should are the right wall, the lion statues (which however are somewhat problematic since they're mirrored) and maybe the temple and the elements in the far background. Not only that, the shadows coming into the picture from the background heavily suggests light coming from the back, but this isn't actually supported by how anything looks, with the possible exception of the guards. On top of that the trees are somehow casting larger shadows than the Buddha statue, the guards' shadows go in different directions (and overlap - a big no-no) and the wall on the left side is casting a shadow to the left despite its right side being in the shade. Basically, if any shadows are to be cast towards the camera, from the background, everything we're seeing should be in the shade. Aside from silhouettes lit from behind, we shouldn't be seeing any light on any of the objects.
Now, how would I suggest to fix this? Well, I don't expect you to like what I have to say, but in my mind the best thing to do would be giving the entire workflow a complete overhaul. I don't think the current stage is necessarily beyond salvaging, but it would require rethinking certain aspects completely (such as the shadows - they simply don't work at all) and the results would still be nowhere near as good as they could be if the stage was recreated with more of a cohesive vision. As I mentioned, the stages in the original game were indeed created by compositing a number of 2D elements together in an attempt to create a cohesive environment, but that was at least in part because of technical limitations. There were simply limits as to how many and how big elements they could use to piece together the stages, and that meant that, for example, certain parts needed to have generic enough lighting to work in multiple different locations. Since we are not bound by those same limitations, I see nothing wrong with taking a very slight creative liberty and deviating from the original art - in the pursuit of a more accurate and realistic representation of what they were trying to achieve, as opposed to carbon copying the light values of each individual piece that makes up the background.
To make a long story short, I think the background art would benefit hugely from being built as actual locations in 3D. Whether this scene would then be used to render out the 2D elements for use in MUGEN, or simply as a reference for a 2D artist making the final art, or a combination of the two is kind of beside the point. The point is that a complete three dimensional location can be lit in a realistic fashion, which is absolutely key - I honestly think that's the only way to get a truly cohesive and realistic look for any of the stages. Ask anyone working on level design for any game today; creating nice looking art assets for environments is ncie and all, but it's the lighting that creates the mood and sets a memorable location apart from a dull, forgettable one.
This project WILL take a long time to complete. Mostly everyone seems to be on board with that idea, and that's great, but I still feel like some aspects are perhaps a bit rushed - the background art being one of them. It's my understanding that many of the elements used for the backgrounds are being made in 3D already, but I would very much like to see the next step being taken, and make use of 3D for composition and lighting of the stages as well. There's definitely still room for background assets to be made in 2D and composited into the backgrounds - it's a common method even in big budget movies, after all. There's certainly also merit to the idea that certain things are simply quicker and easier to create (with similar or equally good results) in 2D - but this is once again a matter of not limiting ourselves to the technological boundaries of 1992, but instead making the most of the technology we have in 2011.
I hope no-one takes this the wrong way. I don't mean to shit on anyone's work, or come trouncing in with some sort of holier than thou attitude, telling everyone else how they should be doing things - all I want is for this game to look as good as humanly possible. Art assets not being up to snuff in the beginning of a project is not necessarily a problem, they can always be replaced later if need be, and there are certain reasons why having placeholders is a great thing. I just want to keep everyone's mind open to the idea of doing things differently, and what possible benefits there might be. From what I can tell there hasn't been much discussion at all about how things should be done before people have started working on things, and for a project this big I think there kind of needs to be a certain amount of discussion and a consensus being reached on certain issues before people dive headlong into production, or else people will find themselves having to scrap or redo things simply because they didn't live up to standards or specifications not in place until later.
Again, sorry for being incredibly wordy. Would love to hear thoughts and comments from everyone else.