You are doing a good work, Dave. Everything looks good. The models are simple, so I find it difficult to add much.
Yes. I notice the distortions in FPSC. The towers look flat and the colours look less vivid (because of the illumination?).
My only critic to your texturing: The texture wraps some pairs of faces too smootly, therefore, the edge by which they are joined does not look natural. You would better make it more sharp, in my humble opinion.
I have tried merging a baked AO and a texture and got a result. As I do not have much experience with preparing models for games, my solution may be rubbish:
1. Add the texture to the object's material;
2. bake the AO to a new image and save it;
3. add a new texture layer to the material and load the AO image to it;
4. set both of the images' "Map input" to "UV", and "Map to" colour;
5. set the second texture's blending mode to "Multiply";
6. create a new Image in the Image panel. Bake the texture to it.
7. This will bring a dark result, so you might be interested in increasing the AO energy.
8. The nodes editor can be more flexible.
Edit: my English is especially bad today. Sorry.
Cheers,
Luiz Fernando.
Luiz Fernando
Belo Horizonte.
A sombra deste dia envolverá o mundo em cinza.. então o Sol se ajustará a você.. [Linkin Park - Shadow of the Day]