I'm not partaking of the compo (and don't have an LD account), so I figured I'd leave my comment/bug report here:
This is pretty slick, I definitely like this mechanic, and don't think I've anything quite like it before.
The weapon breaking/cooldown mechanic is a little confusing, it doesn't always happen and I'm not quite sure what the conditions to trigger it are. Is it something to do with the colors of the enemies and the weapon?
When you manage to get a bag or three, the bulk of that lane's discovery section drops down past the bottom of the screen which makes it kind of tricky to deal with monsters, or use items, that happen to have fallen in.