Well. I forgot to save step 2 so... here's the final product. Sorry. :(
Anyway, the way I work is after I set down a foundation like in step 1, i use special layers with effects such as overlay, soft light, etc to adjust the colors. Then I create a new layer in which I paint and color using normal layer style. Rinse and repeat like 4-5 times and that's what I come up with.
I think the problem with my technique is that the original line work gets lost in translation. I begin to lose motivation to continue(or to start) because I know that what I do will be erased by later layers. Hmm...if only I did clean enough lines worth saving...