All right, with the castle glitch fixed, I managed to play all the way through. Extremely impressive all around. Despite the lack of ExGFX, the hack manages to pull off a very distinct visual style and mood. The storyline twists and non-linear overworld travel are nice touches as well--I especially like the Bowser battle/Princess rescue occurring so early in the game. I'd really love to see this followed through to its completion.
A few more specific comments...
1. Mario's looking rather pale on the overworld. Are you sure he's feeling all right?
2. I quite prefer your dark blue pallet to the original game's, which always seemed to veer just a teensy bit too much toward the purple side. However, the blue Koopa Troopa's shoes now suddenly get darker when it's knocked out of its shell. Then again, these are the same shoes that can change color depending on what shell their owner is currently wearing, so maybe that's not so odd.
3. The post-castle #3 message makes reference to Lemmy's "back castle". I'm assuming this is supposed to be "black castle", unless his front castle exists as a hidden stage
4. Putting the special item boxes directly inside abnormally irksome stages probably isn't a good idea. If the player accidentally picks up a powerup or gets hit causing the item to fall from the box before the point where it is supposed to be used, they are forced to trek all the way through the stage again in order to get another. I can understand why you might not want them to have such easy access to the special items (especially the spring board), but it seems a rather skewed trade off for the points where they're essential...
5. Time limits are just a little too stingy in a few stages. It doesn't really affect the difficulty of any particular stage, but I do end up hearing the "hurry up!" fanfare quite a lot, which of course is extremely emotionally distressing. Personally, I always thought the timer itself was a bit of a relic--an unnecessary holdover from rush-to-the-right can't-even-go-backwards style of the original SMB. SMW, on the other hand, allows much more opportunity for exploring and fooling around, and I always liked to take advantage of these. And honestly, the timer doesn't even have any in-game explanation. Why is Mario plagued by a mysterious countdown? Why does it cause him to die when it runs out? Why does hitting a goalpost nullify it? 'Tis one of the great mysteries of our time. Again, that's all just my personal preference; it's hardly an intrinsic flaw as is.
6. In the forest part of the last level, a flopping Cheep-Cheep briefly changes into a Piranha Plant stem. Such an amusing reversal!
7. Swoopers and spike tops make hilariously good stand-ins for metroid enemies. Bullet Bills less so, and they shoot out from odd places. The one who appears a significant distance above the recessed pipe especially bothers me.
8. The readme is a filthy liar--there is too a yellow switch palace in the game! If you press right after beating the last stage, Mario will walk off the map. Press up after this, and you can access the palace. It will even distribute the yellow blocks once you beat it! What it won't do, however, is save, and you can't get back onto the map once you walk off, so this beating it won't really do you any good, but it's fun to do in any case.
But that's all a mass of absurdly minor quibbling. What you've got here is an extremely enjoyable hack which manages to feel fresh and innovative without drastically altering the game play or throwing in most of the traditional bells and whistles. Excellent work on all fronts.