Since the last update, I haven't gotten much done with this hack. Other than writing down a few notes, there wasn't enough motivation into getting this done in a timely manner. However, after VLDC 12, I have gained a new interest in resurrecting the idea. I've even used new techniques I've learned from the contest.
Time will tell whether I will continue with the progress of this hack. In the meantime, here's some screenshots showing updates to some of the levels (inc. one from world 2).