As a non-musician listener, I 100% agree. When I'm intimately familiar with the sources, I can easily recognize even the most liberal of rearrangements. Also, I actually find a song more enjoyable if one source has a stronger presence than the other.
For example, one of my favorite songs from any compo is WillRock's "Walking Weapons Unit" from the GRMRB 2011. The lead was heavily, heavily Napalm Man (I think of it as a mostly Napalm Man remix), but Elec Man was still present throughout the entire song in some form or another.
To me, it takes a great deal more skill as a composer to pick one of the two sources as the dominant one in a remix while seamlessly integrating the other source into the song in other, less obvious ways.
"The Sky Demon" did a great job with that. Tengu Man was much more apparent than Moliarty's Tower, which had been more extensively rearranged to fit with a Tengu Man lead, but both sources were there, and the song was far more cohesive and less jarring for it.