Any ideas on how to work with our limitations

So far, as it looks to me, we have to absolutely make sure anything rendered is to 100% scale and snap to a 96x96 grid. I still have yet to hear back about sub-pixel translations (like movement and camera smoothing). However, just to be safe, I'd say treat it like you're developing a game for a native 96x96 screen, kinda closely related to developing a game for the gameboy.

For your sprites, keep it 16x16 or slightly below, and make sure your scope for the project isn't too big.

Like I say, treat it like a gameboy project.

I would keep the game pretty simple: even more than other game jams. The player won't be able to see very far, so large, open areas are pretty hard to implement. I'm going to keep most of my sprites 8x8.

Pocket Arcade and Tiny Arcade have a 96x64 screen. You could look at what people have done with it for inspiration. Here is a link to one of my projects Mutant Road. Unfortunately I never got around to making the game more complete.