good template, really works good.
but as usual, most of times, C2 physics brake the collisions due to the speed and step iteration.
why i say that?
every time i tried to create a C2 physic based game or tested physics none worked as good as expected, one issue that always happen, if the collision doesn't brake due to the speed, then the speed dumping will take a straight line instead of a gradually decreasing speed of the current angle and fall natural.
bellow image shows the trajectory of c2 physics in no matter of what type of condition, it might get altered and minimized but is always going to be as the black line shows, which is always will try to find the shortest and straightest line instead of curving and slowing over time, as normal physics and real physics will do. it might get close to the green sometimes but will always brake if that happens. if its not the angular damping then is the speed iteration, and so on.
edited:
i found the r0j0hound's physics plugin (chipmunk) reacts much better, however it has some weirdly snags where it shakes on slow speeds.
but your example still stands better then most examples of pinball, great job.