My personal vote would be for the higher specs, aiming for more along the lines of a UT2k7/GOW 8k-10k, then HL2 4k-6k, as HL2 is 2 years old and not exactly nextgen anymore, and since most of the folks participating in the contest are looking for something that will be fun and boost their portfolio, having higher specs is less restrictive and more likely to look impressive in someone’s portfolio.
As far as keeping the original look, it is possible to do a realistic version but maintain the style. Bomberman Angry Teenager Version is an aberration but it’s not the only possible outcome with adding realism to a piece. Looking at the Megaman characters, as the series progressed the characters got more complex and detailed, so I don’t think adding seams and nuts and bolts is going to ruin the style, but making them with realistic human proportions or the usual “realistic = covered in rust and dents and scratches and chipped paint and looks like it’s been beaten by large men with hammers for 12 years” look wouldn’t make it seem megaman-ish.
I would also either stick to original megaman style, or X style, but not both, because there is a unique style for each but not as much crossover between Regular and X.