Hi there, thanks for the comments.
Regarding your observations.
1. First couple of levels, that definitely helps. However as you progress, there are skulls that need to drop at least 2 or 3 levels; which forces you to move about and dig more holes in line with each other.
(I've captured a little animation and included it above which includes pirate skulls (need to drop 2 levels) and king skulls (need to drop 3) which hopefully illustrates this - also shows you getting a line of holes planned and then another skull walks into one and you have to move to re-dig the hole once the skull gets free).
2. Skulls on the upper level should be visible. I've observed the behaviour at the beginning of Sabreman's video a few times during development and it usually relates to memory issues (i.e. running out of the 48K available). Later in the video it appears to correct itself (on the 2nd or 3rd playthrough) so I have to assume it corrected itself. In my playtests of the final game I've not seen a repeat of those issues.
I have noticed a couple of minor bugs which I've corrected now and am playtesting to confirm they've not broken anything. I've also increased the speed of the pirate skulls to make them a little harder to avoid. Assuming I see no further bugs, I'll upload the bug-fixed version in a few days time. Note there is a slightly different colour scheme (as per the animation above) to distinguish between v1 and v2 of the game. I think I prefer the green ladders and being able to identify if I'm digging or filling in the holes.