The project is not dead. I resumed it recently after 1 year doing other things.
I've made more progress in the data decoding side. I have used WinUAE and tweaked some values in memory in real-time to see what they meant and got some more info (got some nice crashes too
Disassembling the code is not an option for me. Scares the hell out of me. Now I have enough material to code the 1st level without too many manual additions.
I also added the water monster. Creepy.
I've got a ton of other things to do, like proper object interaction, proper isometric display, etc...
The code has been ported to the DS and it works. But it's slow (I'm sure they changed something in devkitpro as my other stuff is also darn slow now).
Also, text messages are hard to read on a 256x195 screen with rescale!!