I just have to say this is really awsome! The most I've tried working with wood is making swords for Magic Knight Rayearth. Sadly they are still unfinished. Need more hours in the day. LOL.
I do agree you need to add something to it to make it look more three dimenshional and not so 2-D. Comming from someone who has spent the last two years now making a scale sized set of these keyblades for the art show, I can give you some tips. Take whatever you want I won't be offended if you totally blow me off.

1. Ignore Toodstools paint color observation. No offense but it is a darker shade of blue than she has not purple. I had the same reaction when I first painted mine and the problem is the red in the middle reacts with the blue and creates the optical illusion of purple.
2. If you want the eyes to not look so bugg eyed make the lids bigger. The lion should look half asleep or kinda bored.
3. you should give the mane a little red dusting on the edges. You can use the same kind of tecnique you used with the green tipped blade.
4. The lion should look like he is swallowing the handle. It's easy to achive by painting. You don't need to carve it out.
Like I said it looks amazing and it's up to you what you want to tweek. If you'd like you can use the pics of my small keyblade as refference. It still needs a little work, but is mostly done. Sorry for the bad paint job but it's hard to be so precise when the details are so small.
http://i7.photobucket.com/albums/y256/Tahiri_Solo/Fanart/Hand%20made%20art/KingdomHeartsclaykeyblades024.jpghttp://i7.photobucket.com/albums/y256/Tahiri_Solo/Fanart/Hand%20made%20art/KingdomHeartsclaykeyblades025.jpghttp://i7.photobucket.com/albums/y256/Tahiri_Solo/Fanart/Hand%20made%20art/KingdomHeartsclaykeyblades026.jpg