This project is really cool, and I like where it's going so far. I think, like the OP, I'm one of the few who was seriously disappointed by the art direction in CMI after being spoiled by Steve Purcell's amazing work in the first two games.
Anyway, one obvious thing that is flattening out this background, making it look too clean, and making it not fit the aesthetic of the old games is the black outlines. CMI's cartoon images had sharp outlines. The painted images in MI2 didn't, really.
See this image? The only place you can make out dark outlines is in really high-contrast areas like the house on the left. And even then, the lines aren't as hard/pixellated as in the background you're working on.
An easy solution would be to lighten the outlines, perhaps just making them a darker shade of the base color of the object they're outlining.
A difficult solution would be to make a beautiful Steve Purcell-level background painting, scan it, scale it, and put it in!