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Completely rethought and redone!
Resolution increased to 256x256. (Previously 64x64) I realized just how limited a low resolution is on a wide screen.
Redid shape to exactly match the carved pumpkin instead of being an estimate. I had scaling problems in Paint.NET, so my solution was to increase the resolution and start there instead of starting at 16x16.
Added shading to the holes, exactly matching the darker area in the carved pumpkin. Its transparency is also set accordingly.

A well thought-out, simplified, and less obtrusive blur!