First, a very bad sketch, just to visualize how the body would look.
step 2 of 5
I used color balance, brightness/contrast and saturation on a copy of the source to make the skin. I redrew the gremlin's head with a little more detail, put the sketch over the skin and used a mask to take away everything that wasn't the head. I smudged it and then, with the sketch still over the top of it, used exposure adjustment layers (dark and light) to shade it.
step 3 of 5
I used a mask again to draw the body parts. (Tip: When I used the layer mask on the skin, I inverted the mask. This made the layer "disappear". Then I used the brush to make it reappear in the shape I wanted.)
step 4 of 5
I smudged each part, but I wanted more texture. I used Filter>Noise>Add Noise and then Filter>Blur>Lens Blur for that purpose.
step 5 of 5
The reflection was...challenging. I started with copies of the front gremlin pieces, reduced to fit. I arranged the parts layers according to what would be closest (long leg and tail on top, bent leg on the bottom, ect.). I used a layer mask on the parts to allow the clock filigree to show. Then I smudged, texturized and shaded the parts, as before.
I also changed the time on the clock. Did you notice?