well I know you have a restriction, mine was more to convey what I saw, but here's a quick attempt at 16x16
nice work carnivac, your version is by far the most readable and appealing, looks plenty goblin-like to me
also.. A knight has cometh to slay thy goblin!!1!
and JMB you should study other small sprites including some of the edits, NES sprites in particular and take note of how to depict/convey form with such a low pixel space, because it is far from easy to do well. quite an extreme leap from traditional art to not so much pixel art but low restriction pixel art
turned out it was more of a goblin horde than a single goblin, so he kitted up and came back with a posse
<Edit II: didn't look knightly enough, and did an animation
lol got carried away, I'll stop now.