Very neat little game! Always neat to see some Warioland-style graphics, that's a bit of my childhood right there, and the demolition idea's a fun one I'd love to see more of.
I understand the controls complaint - since I went in blind, when I pressed the X key and nothing happened, I just assumed the "B" key was on something else. Two drownings and several key presses later, I used the hammer by accident and from there could figure out the controls. I saw you'd planned for a normal B action, which would handily solve this issue - if you end up adding that action later, I think an up+B attack would truly complete the different-directions-for-different-moves thing!
Also I love the sprite art. It's got so much charm going on straight from the title screen, and I can easily see it among my gameboy games.
PS: At first, I thought the third level was me going to wreck my employer's house as revenge for making me wreck that outhouse. Still not entirely sure I was wrong, because that was a really good chair.
PPS: Some bugs - if you press "continue" after clearing the game, you get to see Oliver's body floating in the top left corner. And if you hit "new game" after clearing the game without refreshing the browser, it just replays the ending!