So, one question (which I think is kind of silly): can I use a color with lower opacity? I think it would blend with the background and count as a fourth color (which would be against the rules).

No, you can't use transparent sprites if they create a new, fourth color. (Kinda irritating, but rules are rules.)

Uh, if it counts as a 4th color then it isnt allowed...

ok

Dithering!