Yes C'sar, the music is SAD!!!
I'm re-listening to it now - OK, Graham's theme is more "majestic" than sad, but Alexander's and Rosella's are definatly melancholic, depressing, down-beat, and SAD, any way you slice it.
I hope the rest of the music in the game isn't that depressing... :-/
Does copyright issues preventing you from using musical arrangements from other KQs (like Tierra did on KQ2+), or did you decide to go for originallity and write new themes?