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I think that's totally within the spirit of the jam! If you want to be safe, it could be cool if you included the original prototype alongside the finished game when you submit - maybe with a little .txt about how you expanded from the prototype and where it took you.

Can't wait to see what they become (:

YUS.
I have a prototype from one of the same Jams I would like to do the exact same thing with. I'll probably keep the old jam entry page up and resubmit this as a new project, but with a link to the origin's page.

Love the Jam idea, by the way.