Yes its the shareware/demo version off of dosgames.com. What happens is I put the game on the lowest difficulty, and it plays fine, but when I exit DOSbox and load the save the difficulty shoots up for no explicable reason. Everything else works great, and I can load games fine as long as I don't close DOSbox. I have no idea why this would be happening.
I heard about GOG and thought maybe the issue would be fixed, but apparently it isn't.
Also, when I close DOSbox it never saves the C drive mount. I have to always re-mount it manually. I don't know if this is normal or not. I use 64bit Windows Vista and DOSbox 0.74.
Well, the "good news" is that I can duplicate the error you are getting. As for fixing it, I don't really have a solution.
The only thing I can think to offer is to start a new game under "Still Kicking", and then use the mario cheat code to warp to the level you last saved on, that appears to keep the "Still Kicking" difficulty level. However, you will have to start at the beginning of the level and with no weapons aside from your pitchfork.
To fix the mount C issue, open your dosbox.conf file and add whatever lines you want to execute automatically at the bottom of the file, under the [autoexec] section.
For Windows 7, to open your dosbox.conf file, press Windows Key+R to open your run dialog box and then type/copy-paste in: notepad %userprofile%\AppData\Local\DOSBox\dosbox-0.74.conf