It's great to see a fresh take on using death in order to progress.
Certainly an interesting idea, and with the limited number of lives you could create some very thought provoking levels using what you have here.
As for the levels (level?) of the game as it is now, I think I encountered a problem when I tried to leave the level. I thought of getting the sparkling item before leaving the area, but I couldn't manage to collect it and leave too... maybe I suck or maybe something went wrong, maybe you can tell me. :P