ok, got some big news! I figured out what the mystery level was! It must be Level Zero, Playable! In the image below, I map out where you begin the level. You are inside the wall, and if you proceed to the left, you will die when you reach the end. If you proceed to the right, you will go out onto the ground below, and begin normal adventure. Once you have come out of the wall, all normal rules apply, and you cannot go back inside. Now you are in a clone of Level 1, but it is Level Zero.
Special rules for Playable Level Zero:
#1, you begin play with scrambled buttons, invisible menus, and corrupted dark world. You cannot see anything except The Prince, The Guards, and The Bottles. (Since you know how the menu works, you can blindly access button control, hit "Initialize" to reset all buttons, and then blindly redefine buttons as needed.)
#2, KILL Button is now enabled. When redefining buttons, you can assign KILL to a button.
#3, you begin play WITH the sword, but you Must Not Use Sword. If you engage in battle with a guard, play will Immediate Stop, and you will be instantly warped to Level 6. As long as you do not pull out your sword, you may continue to explore Level Zero. With KILL Button enabled, you can kill guards to avoid pulling out your sword. (I have done this with both guards. Either battle immediately results in Warp to Level Six.)
#4, killing guards will not prompt the "Victory" Music, because this is Level Zero. All Other Sound Effects should behave normally.
#5, once you complete Level Zero by going through the EXIT DOOR, you will then begin LEVEL ONE. It will still be corrupt (bad visibility), but once you complete LEVEL ONE, the Princess Cut Scene will remove Level Corruption before LEVEL TWO.
#6, during exploration of LEVEL ZERO, all glitch holes are still fully functional. I did not continue experimenting much tonight, because it's late, but before I stopped playing, I was able to use Hole #1 to Warp to LEVEL SEVEN, and Hole #2 to Warp to LEVEL SIX, while exploring LEVEL ZERO.
I reached LEVEL ZERO by the following pattern:
#1 -- Go to Room with Final Guard, turn around, and END GAME when leaving Guard Room. (Goes to Main Menu.)
#2 -- Drop down Hole #2 four times, then END GAME going DOWN. (Reset to beginning of Level One.)
#3 -- Drop down Hole #2 four times, then END GAME going UP. (Screen will flash three times, then place the Prince inside the wall, at the following location) --