Let me begin by saying that I, too, had considered entering this Quest. That other WiP and the fact that I return to working life on 1st October stopped me from persuing the idea much further than some initial ideas and reading all the material.
To your piece:
Yes, I think it hits the right style and evokes the world nicely.
I especially liked how the opening is very typical of Gelfling, using mostly physical senses and very little verbalized thought or even dialog.
I've read the original film novelization and must say your style here reminds me of the writing.
With all that praise, you'll want some critique too, and some critical thoughts, so here we go:
1) The characters you set up are convincing and in-style of Dark Crystal. My thought here is only... maybe they are too close to the two Gelflings we already know? Make sure you disctinguish your two from those in the film.
2) The word-count of about 50k for the finished novel does call for a tight narrative, but I'd have liked more description of the world (flora and fauna).
Also I like the location(s) you set up, although we won't likely be seesing much of that hidden palace?
3) I do like how you centralize the theme of the Skeksis Lie of being noble and benevolent. My only concern would be that this might be 'too early.' After all, this seems to be The Central Conflict that has been set out for the new stories to be written. I don't know, just my 2c here.
All in all, I think this is solid Dark Crystal. I would definitely read more. I'm curious how the two characters you set up will meet, and what their adventure might be. The obvious one being: go see for real how the Skeksis are... And here, again, I think maybe it would be good to NOT do that, as it is the very obvious plot.