Thanks a lot. The .cap I posted was actually very stripped down and I'm still not sure what's going on.
Develop games in your browser. Powerful, performant & highly capable.
Here's the new example:
http://dl.dropbox.com/u/5426011/examples16/tilewip.zip
I tried to comment a bunch.
Thank you so much r0j0. It's going to take me a couple of days to wrap my head around how to change my project into this, but at least it's here in front of me and i know it's possible.
Just wanted to post and say thanks again! I implemented this and got it to work finally. Turns out I have to make some UI changes to make it work with my project, but I'm glad to be moved on to the next step!