Thank you everyone who commented! I'm trying to incorporate all of the suggestions. I'm still learning Photoshop, so it's slow going, but I'm getting there! I think I've fixed the problems with the hard edges of the roofs. (Duplicated the layer, selected the roofs, Gaussian blur, and then set the opacity). I also added a wooden frame, but I'm not convinced it looks better. If I go with a wooden frame, I'll use a better pattern fill, this was just to give me an idea of what it would look like. Thoughts?

I didn't notice that the houses looked like they were floating until it was pointed out! Talk about a DUH! moment! I tried stretching the house shapes individually, which I think has helped. I'm going to go in with a brush and fix them up a bit as well, but I thought I'd post what I've got so far.

I've been playing with the cliff for ages and it never seems to look like anything other than a horrible blob so I took it out all together. I'm going to try some hill shading and just have a bit of a slope.

Click image for larger version. 

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