Welcome to the SMW:The Lost Islands topic!
Super Mario World : The Lost Islands (In short, SMW:TLI) is a hack that I have been making for a long time.
I don't want to spoil the story. Okay?
There are only 3 and a half levels now. But later, there will be more levels, and maybe, custom GFX!
EDIT:Here are some screenshots:

The Intro level(C5). Note the cutoff*points*
EDITNOTE:I fixed the cutoff.


The custom OverWorld! :D
EDITNOTE:Anyone noticed the cutoffs?I fixed them, too.


The beggining of Green Valley 1
Mario:BANZAI BILL!RUUUUN!


Green Valley 1 Underground area 1


Green Valley 1 Underground area 2


Guess what's between those Note Blocks...


The beggining of Yellow Switch Palace

Am I missing something?Oh, the download link!

Download!(IPS)
PLEASE KEEP READING FOR IMPORTANT INFORMATION
To run this hack, you need:
-A SNES Emulator
-Lunar IPS(Find it on the tool list)
-A clean Super Mario World ROM. To see if it's clean, use the Clean ROM verifier. If your ROM doesn't work when patched, download from another site.

What to do after download:
1. Open Lunar IPS and click "Apply IPS Patch".
2. Select both the Clean ROM and the IPS Patch. The program will do the rest.
3.Now you can play the ROM on your emulator!
Comments and feedback are allowed.

6-day bump.
Well, I should post the progress here.
June 7th, 2009:Green Valley 3 finished. Aslo named the 2nd Island:Broken Land Islands.
June 8th, 2009:Started Green Valley 4 Sunset.
Heeeeey...Why no one has posted a comment besides me?

This looks pretty fun. Good work!

Im gonna go try it out right now.

Well Ive played and its a pretty good hack.

How did you hack this. what did you use ?

Lunar Magic, which can be found at SMW Cental's tool list.