Yeah, that's either going to result in blurry or distorted graphics (depending on filter vs straight nearest-neighbour resize), or require an entirely additional set of sprites just for neutrals.
From the next NL update, any styles using custom lemming sprites that are just recolors, don't need to provide spritesheets, they can just put in a text file things like "LEMMING_HAIR xFF00FF" (to make the lemming hair death-magenta colored). Even the destination colors for neutral, zombie, etc recoloring can be done this way. Creators of fully custom spritesheets would need to instead provide a source/destination color pair, but this is already the case for other situational recolors like athletes, zombies, etc - neutral is just one more condition to provide such data for.
With regards to your comments about the yellow - I also agree that the brightness, not the color itself, is what's off-putting about that one; a darker yellow might work more nicely.
This might be a subject to continue discussing throughout the Release Candidate phase, because during this time users can freely experiment with modifying the recoloring data to actually see proposals in action, instead of having to mock-up in a graphics editor or just guess.