Smithy re-design WIP

[Chutzpar]

I'd go for a bluer kind of colour for metal, personally, or, if you're planning on adding rust, then go for a slight brown like you said, otherwise the rust would stand out too much.

The shading's kinda wrong for a dent; you want harsh and (fairly) straight lines for dented surfaces, and possibly highlights around them to show where the metal's curving inward. I'm having some difficulty finding a decent reference for you, and I don't know what to tell you to make it convincing with pixels because pixelart really isn't my area of expertise. Someone cover for me? :C