i think that way it is hard to get the final look right...

never tried it before. still a sprites newbie but I would try to render out lets say 50 frames of a lttle cloud put this in a loop on a sprite. delayed of course. and then putting sprites on all the verts of the castle like bendingiscool suggested.

i think the render times will be better and you have two process'.
1. get the clouds right
2. get the particles right

maybe its easier, but between fluids/sprites and me there is still a wall.

greets