Between Good and Excellent
I can't go saying this flash is excellent, but I can't say it's good either. It's in between. The animation itself was very well done, very enjoyable. Most of the music was well fitting (Except the Requiem of a Dream song, it doesn't fit). I personally think that you should've just used Sonic and Sparks for that new team. Wolverine and Earthworm Jim are... out of place... in this kind of thing (Same with Magneto and Ridley. Perhaps using the other rocket swordsman from Rocket Knight would be better).
The story itself is decent. Being an amatuer writer, I can find a lot of uniqueness in your story. For example, the whole "Super Sonic is a monster" thing with the added incomplete speaking, and how Metal Sonic (Mecha Sonic is actually what you deemed as "Version 2"), a robot who normally cannot speak, speaks to Robotnik.
I think you should put credits on the end as well (Namely put that you animated it and such, where you got the sprites from, and what music was used.).