The dying was intentional. It's meant to learn the player that when you die you spawn at your last hit torch. I wanted to create a game with very few on screen text and let the player experiment, perhaps I went a little overboard :)
The death loop on the third level was definitely a bug. You can always skip a level by pressing escape and go to the next stage or use the stage selector on the main menu.
Thanks for taking the time to download and play my game.