Before
After
These are larger than suggested, with apologies to those like myself with slow broadband.
Note that I also reduced a brush filter opacity fill by about 50% between the first and the 2nd (the effect was over done in the first one but it took me a while to realize it).
There is much greater color fidelity compared the original.
And about 2/3rd the bytes of the first example.
There is one minor correction - you wrote:
4) Go to Edit>Mode and select 8 bits per channel.With CS3 Mode is under the Image menu.
~~Thank you very very very much~~
Your notes will get tacked to the wall at least until I memorize the process.