My responses to the levels and the announcement of the winner follows. Be warned that there are slight spoilers!
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Advanced by SecretGlitch
The graphics and music in this level are definitely the high point and are obviously exceptionally polished. Sadly, I found the level really frustrating, but most of that is due to limitations in the built-in kill tile collision detection. You were able to achieve a lot in four hours... I'd like it a lot if you tried completing levels in a short time period more often!
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Within the Treetops by PeppyHare4000
You've managed to create quite a vast level in a fairly short time period. In terms of plot, yours was my favourite of the competition. I love the two endings, in particular the differences between them as discussed in the level thread. They may be my new two favourite Knytt Stories endings full stop. There was one jump in this I was never able to accomplish, so I'm not sure what I would have done without the cheat.
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"without a cause" without a cause: the non-game by rhetoricstu
This is some pretty decent metafiction. I feel like it referenced something I don't know (besides Knytt Without a Cause)... at various points I thought of Dark Star and Source Code, but I don't think it's either of those things. Let me know if the plot is original, or what it alludes to if not! However, I'm not sure I can classify this as a Knytt Stories level with a clear conscience...
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Vague Feeling by Headgrinder
I highly enjoyed the art and music for this, but the level design was pretty rough. On my first playthrough I became stuck in an area from which there was no escape (even though there was a savepoint there), which was kind of annoying. I'm interested in what the story was (what was that smell?), unless you'd prefer to leave it to the imagination, of course.
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The Lighthouse by Ultigonio
This has definitely been improved from the original release. I love the visual tricks, such as the lights and the fog fading in and out. The use of the fog to obscure objects is a unique touch. My one issue is that it wasn't completely clear when the key had been picked up since the sign text and shift were still there. The dynamic music you created is really nice, too. It's a shame it doesn't transition that well in the Knytt Stories engine...
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Explorarium by rainulous
Your level features some of the prettiest use of the default tilesets / objects I've seen in a Knytt Stories level. Others have called the visuals bland and predictible, but I really didn't think this was the case. I loved the way you conveyed the solution to the maze. Unfortunately, there were quite a few bugs, both small graphical errors and void screens. x1005y1012 was the biggest one. Also, the extreme level of backtracking gets fairly frustrating by the end... by the time you get the eye there's very little indication that you're meant to be searching for new passages in previous areas, and the one passage you're most likely to find (x992y1003) seems to serve no purpose other than a slight annoyance.
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To conclude, I'm very pleased at the variety this competition produced and I'm glad I was able to play all your levels. Although I enjoyed them all, the level I feel was best and captured the theme well was Advanced by SecretGlitch. I look forward to the competition you decide to host!
This was a long post, so apologies for any errors...