Why is Castle GRAYskull GREEN??!

Why do you assume that Castle Greyskull must be covered in moss in order to be be green? Why couldn't it be made out of green stones?

I have often walked passed a castle made of green stones in a major city.

 

One of the great mysteries of the ages.

Kor

 

Because then they would have called it Castle Jade Skull. Although if it wasn't a moss problem, that may explain why the inside of the toy was as green as the outside... However if Eternian Green Moss is as toxic as black mold on Earth, then that may explain why the indiginant and college kids don't party there on Friday night.
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You know the simplest explanation is that the local stone is some kind of iron, manganese or chromium ore, which tends to be naturally green. The name just comes from the King that built it.

Personally, I like the idea that the skull part isn't a carving, but an actual fossil of some ancient, giant creature. IIRC some of the original scenery paintings did indeed have what looked like huge bones seemingly holding up the main structure and the back of the castle had something like a spiky backbone over the roof & down that back.