The 2 palette .gf file employs a unique RGB palette format that I have not seen anywhere else, hence why it took a while to decode as there were basically no online references to look upon, and I had to manually brute-force the game using custom.gf files.
COLOR FORMAT:
R - 256 - 8 bits
G - 64 - 6 bits
B - 32 - 5 bits
RGB865 format - 19 bit(?) color, above High Color but below True Color, proprietary Ubi Soft format?
I don't think it appears in Rayman 2, the sister game to Dinosaur, and even though Ubi Soft's earlier game, F1 Racing Simulation, uses .bnm files, it doesn't seem to run on the same engine as Ray2 and Dino and thus texture files are in a foreign format.
At first glance, RGB865 seems just like a odd-numbered RGB format, However, unlike standard unconventional RGB formats, where each color has its own data domain, it seems that one of the colors interacts with both of the other colors, and influences them in some way. In the case of Disney's Dinosaur, it was found that green was the split color.
PALETTES:
The 2 channel .gf format uses 2 0-255 palettes, with one colour being represented by both palettes.
Blue-green channel (0-255 from L-R)
---blue channel goes up by 4 every time blue repeats, repeated 8 times to form 32 shades of blue. For every 'column' of blue, green increases by 4.
Red-green channel (0-255 from L-R)
---the green goes in increments of 32, repeated 32 times. Each column of green is 8 wide. The red spans the entire sector, with a full 256 shades.
The green value is derived from putting both the blue and green values together. In total, this creates 64 different shades of green across all possible combinations of red-green and blue-green. The easiest way to show how the green interacts with both channels is to see them as a 2d palette:
For those with a more intricate knowledge of binary and RGB palettes, the reason for this green format should be pretty obvious - The LSB and MSB of the green channel interacts with the other 2 channels in some form. In the case of the Dinosaur palette format, the MSB of the green channel overlaps with the LSB of the red channel and affects the final red color, and the LSB of the green channel controls the blue-green channel, but does not affect the final blue color as it does not overlap with the final blue channel.
Many thanks to szymski for creating the original set of texture tools and for cracking the .gf file format itself, you're a legend.
I have MATLAB files that can encrypt and decrypt these 2-channel .gf files, and if anyone is so curious I can share the files and their related look-up table .MAT.

