Wow, what a hilarious take on this typically majestic tune. It's fun to listen to this enigmatic song take a turn for the dumpy, waddling, fat penguin feel that the chiptune has given it. No offense, it struck me comedically on an emotional level, and that's better than nothing.
I agree with the other critiques in that you need to do something to make the theme feel a little less repetitive. Instrument / harmony changes, maybe have the theme take a break every now and then.
I think ultimately, the awkward instrumentation and repetition can work for you, but you'll have some work ahead of you.
Two (of my personal favorite) tracks come to mind:
http://djpretzel.web.aplus.net/songs/A_Boy_and_his_Blob_Cyborg_Blobby_OC_ReMix.mp3
This track has a much less appreciated and much less dramatic main theme than the Secret of Mana song, but the composer has done ... FANTASTIC things making it never feel repetitive.
http://djpretzel.web.aplus.net/songs/Doom_2_Oldskool_Demon_OC_ReMix.mp3
This track has dumpy, waddling instrumentation as well as a repetitive theme, but makes it work in a way I never expected.
I think in both cases, the composers have made sure that the melodies aren't repeating too often, something that may be solved in your track by slowing it down a bit... as I'm not a musician I can't exactly tell you how to fix your attempt, but I hope these references to similar, but more successful, tracks will help your remix grow.
Personally, I'd love to see your very original take on this classic game track come through full development.