Here's the before and after for my avatar project. Just for fun I used a picture of myself. I pretty much stuck to the guidelines I laid out in my sketch. I changed the skin color with a hue adjustment layer, changed size/shape of features and ears (basically stretched everything out and made it bigger) with Transform/Scale, adjusted lighting with Curves adjustment layer, changed the hair using a paint brush, and created some tattoos by tweaking a butterfly shaped paint brush.
Here's the "before" image:
And here's the "after" image: