Cute. Yeah, something is off w/ that pup. Looks like you have too much light also. I would make sure you have no interpolation. Are you using an alpha mask?(not sure what kind of texture that is). If so make sure it is there. Also If you are using GI make sure BOTH options for light thru trans are checked. If you are using a trans/alpha map maybe the colors are inverted(white/black). His mouth is also too red, but you might not be there yet. The seal also looks very yellowish instead of the darker brownish/grayish color.Also get some refraction on the eyes.

No need to think outside the box....
    Just make it invisible.