I don't think the shadows hurt it at all. They add depth. And you certainly got the gleaming red eye! A beauty.
You might want to take a look at Noiseware for noise reduction. Much better for nr than the native CS3 tool and super-easy to use. Just select the area you want and run Noiseware on it. Done deal.
I run it on just about every single sky. I've never changed its default settings, either.