Yes, pixel art mode was enabled. I took a couple screen shots and cropped them to not make them so big to post, but I think the pictures are still too big, so I put them on imgur.
Here's the first one. It's what the sprite looks like when completely unanimated and just assembled. http://i.imgur.com/w4xECRb.png
Here's the other one. I just moved him a little to show what I am talking about. He won't really be moving in this way lol. http://i.imgur.com/TL7cN0v.png
In the second one, the pixels get kind of screwed up, though the blurring is gone for some reason so that's at least one good thing lol. I admit, I am a noob at pixel art despite liking to do it so I know the sprite isn't the most well done haha.
But yes, if there is anything to help alleviate this problem, that would be most helpful. I might just try making a cartoon style sprite instead, but I don't know how to get that crisp looking animation like in say... Super Adventure Pals. Anyway, I am rambling here. My apologies.