The character and environment models are great, just need some lighting/environment to really bring them out. The animation of the player swinging the axe is spot on!
I think you are doing a disservice only calling this an "art demo", there are still many game aspects to it, and you might be missing out on players by only referring to is at such.
I sympathise with many of your comments about 3d.. it's tough, but stick at it! :)