I think it's pretty decent, and not too long. The language is sometimes a bit affected where I suspect Wolf would've been terser. eg. I feel Wolfe might've written 'But I find I am getting ahead of my account.' as 'But I overrun my narrative.'
The story itself is fine. My biggest gripe is that I'm still not sure how the palace thing worked. Invisible water lifting the palace?
The entire time I was reading, I kept hoping - Be a Cloud Nine! Be a Cloud Nine! (See
http://en.wikipedia.org/wiki/Cloud_nine_(Tensegrity_sphere) - a geodesic dome or sphere so large that its diameter is so small in proportion to its volume that it turns into a hot air balloon, essentially.)
That would also be more Wolfean - real (at least, proposed) technology thought to be magic. But I'll admit I'm biased since I love the idea of a Cloud Nine and have used them in 2 of my own stories.