Hmm... I'm not sure if it's the quality of your scanner, or the setting, that's the problem. When I tried scanning my hand-drawn pencil sketches in the past, the results were acceptable. (I haven't done this for some years, though.)

Colouring black-and-white drawings in Photoshop without covering up the original lines has always bugged me. :) I know there're programmes that supposedly isolate the lines and render them as a "layer" so you can add a colour layer underneath, but I've never found/used one. Maybe someone else can help?

One not-so-efficient tool, which I used for my submission called "Gift icon", was the Magic Wand Mask Tool in Corel Photo-Paint. The original by Cooner was a B/W inked drawing; I used the Magic Wand Mask Tool to isolate the white areas of the paper (everything but the inked lines), reversed the mask so the inked lines were isolated instead, then Copied and Pasted the inked lines as a layer. This wasn't perfect since the lines came with faint grey patches surrounding them (the Mask Tool hadn't removed the subtle greys, only the white). I got rid of the grey patches the old-fashioned way, partly with Feather and partly with the Eraser. :)

Far from ideal, and very troublesome, but it was the only way I knew!

Have you tried inking the drawing before scanning?