Yeah I had the same issue! Not sure why I could break the other walls with the armadillo, but not this one.
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Hey, I'm glad you enjoyed the game! Without giving away the solution, it might be useful to know that the armadillo needs to build up speed in order to break through walls. If you got stuck at the wall under the water, then don't worry, it's not a bug or anything. If you're still stuck I'll reply with the solution.