More thorough reply:
Screen 5E on the overworld connects the Swamp area with the regular OW.
Solver of the unsolvable 
Honestly I was betting that this screen and the one to the other side would be two of the last screens to be done.
Wouldn't have thought of a transitional palette...
I made a level palette, and a new d-map for it.
...the thing is though, with the way the screen has to fade out and then back in every time a palette changes, there's going to be a lot of fading out and in around this area.
I wonder if the best option isn't to have a single Misery Ruins palette that allows the combination of L2 and overworld on any screen, rather than only in transitional screens.
That is to say, use your palette for the entire area. That would mean losing your red block highlights on your 6E screen though.
My screen gives the blue candle. We need some items, guys!
True.
I've been holding off because I think we need a clear plan regarding larger items. That is to say, ones that can change gameplay or remove certain obstacles.
I tried to start a general discussion a few pages back, but nothing concrete came of it.
I don't want to place many big items on the overworld because we need stuff to place in dungeons, and those items will often play into the overall dungeon design and progression as well.
I added one yellow to the end of c-set 8.
I noticed:

I suppose I should mention that my thought process regarding solid blacks was to use the last color in any CSet since it would be presumably the last slot to be filled with color.
I can fix it if I get in a new claim first, otherwise dragging the swatch a slot to the left and using the recolor tool on the tiles to swap the 2 swatches should only take a minute.
That progression sounds Good to me. I'm fine with getting the bow and arrow in level one. How do you feel about the boomerang also being there? It's historically an early game item but it's kind of op, so you guys want to save it for later?
Boomerang could be a secret item that you can purchase in a later shop for a price.
I already put a walk-through wall in the Level 1 dungeon, and though it currently has a key behind it now, we still have a key hidden behind a bombable wall at the start of the dungeon, so perhaps the boomerang could be behind another secret that has a lock blocking it as well. That would force the finding of the secret key, and even if somebody uses an otherwise accessible key on the boomerang lock, that just means they'll have to find the first secret key, but they wouldn't be stuck.
I feel like Misery Ruins should not be level 2. I do think, though, given the size of the overworld, the number of areas implied to be in the game (especially by overworld screen 59) and the density of the current dungeon entrances, we can't only have 5 dungeons. To be fair, we could have an overworld-dungeon, and just hide one of the triforce pieces on the overworld (if Misery Ruins isn't already that), and we could have a long stretch which has no dungeons (my shop that I put in the bottom left could herald a town?), but Level 1, Prismatic Depths, Misery Ruins, and whatever is on screen 3E (if that's a dungeon) are all on the right side of the map, meaning that either we make the left side pretty much Mordor, or we put a couple more dungeons in there.
I agree with the locations and the general sentiment.
I suppose I was aiming low due to the project's slow start and the concern that it could slow down again. It would be great if it turned into a full-length quest. I just wanted to avoid extravagant plans that might have been too much to complete given the format of the project.
But whatever's in Misery Ruins, I think that's where we should put the flippers.