Tip: Switch palace switches normally disappear if you replay the level. However, if you insert them as direct Map16 and use the hex-edit at 070B2 in the ROM map, you can replay the level without a problem.
Killroy, the custom music is great and it adds a new amount of positivity to any hack. Are you going to change the hack level name? I also love Rexes and Banzai Bills but it just seems too similar to have a Yoshi's Island I with those creatures in it. It looks very good, and I like the Yoshi custom sprite and the beautiful water in the middle of the stage.
The stage, however, even with those has more of a mountain than tropical feeling. Maybe save that music for a more tropical or watery stage. The level looks great though. It sort of looks unique and trade-marked and another good hit off of the ole expansion pack.