That looks really impressive so far. At the moment I have only two question about this new engine, first, would you still need to change the layer priority for the pipes for example, because of the changed sprite layer, or have you found a way to work around it? (I guess there is a way, because I don't think Brutal Mario had this problem at all, and Carol was using BMF54123's kit after all, so I think that this problem was only for d4s kit.
Second question, because this is the thing i dislike at most on d4s' Kit: Would it be possible to add/change HDMA-effects by entering a new level-area (like for example set a effect up for level 105, go to level 1D2whatever with a different effect setting, and later return to 105 with the original effect?
But whatever. I think it's great that you are working on something like that, because I think at the time it's released it will be most likely absolutely amazing. I can't wait to see what you are going to create next.